3. Economy and SMEs

1. SME Charter 窶 Preventing the bullying of small, medium and micro-sized enterprises, and tripling SME-related budget

The Democratic Party of Japan will adopt an 窶彜ME Charter窶 with the goal of creating an environment in which small- and medium-sized enterprises (SMEs) are able to flourish and shine, and which will facilitate the realization of stable and sound livelihoods for the people. The SME Charter will contain the following action guidelines: (1) upgrading human resources development and job training for the next generation; (2) creating a fair market environment and promoting disclosure; (3) facilitating SME financing; (4) development and improvement of technological capabilities; and, (5) creating mechanisms whereby the voice of SMEs can be heard. Unlike the present Small and Medium Enterprise Basic Law, the proposed SME Charter will comprise the basic policy for pursuing SME measures as a core element in the nation窶冱 economic policies. It will not only be supported by the Ministry of Economy, Trade and Industry and the Small and Medium Enterprise Agency, but will be pushed forward by all sectors of government, including the Ministry of Education, Culture, Sports, Science and Technology, the Ministry of Internal Affairs and Communications and the Ministry of Health, Labour and Welfare.ﾂ?ﾂ?

To prevent 窶彙ullying of subcontractors窶 through unfair pricing and abuse of superior market position, a new 窶廰aw for Preventing Bullying of SMEs窶 will be enacted. This law would prohibit such unfair practices as unreasonable demands by major corporations for price reduction, purchases of goods and the provision of gratis services. Parallel to this, the Antimonopoly Act will be reviewed and more rigorously applied. Furthermore, the functions and capabilities of the Fair Trade Commission will be strengthened and expanded. The government窶冱 SME-related budget will be approximately tripled from present levels to provide financial and tax support to cope with the increase in minimum wages. SME corporate tax rates will be cut in half and the tax burden on the continuation of bequeathed businesses will be reduced.

2. Building a country conducive to entrepreneurship

Steps will be taken to facilitate the establishment of start-up companies and to promote the transfer of technologies (improving the Japanese version of SBIR and the introduction of Japanese-style STTR systems*). Angel taxes will be reviewed to increase support to R&D type start-ups, which are conspicuously short of funding. Tax exemptions on certain portions of investments made in purchasing shares in start-ups will be introduced, and support will be provided to the establishment and management of angel networks. Comprehensive measures for supporting entrepreneurship will be implemented, including the adoption of 窶徭pecial credit lines窶 for spin-outs (new enterprises formed in the process of restructuring) from major corporations. These initiatives will be pursued to achieve 窶徙ne million start-ups.窶?/p>

Fund procurement schemes will be developed to avoid undue dependence on real estate collateral and personal guarantees of loans. Diverse financing channels will be established to ensure a stable supply of funds. Personal guarantees of loans will be abolished in all lending by government-related financial institutions. The 窶廰aw for Facilitating Local Financing窶 will be enacted mandating financial institutions to disclose information concerning contribution to local communities, terms of loans to SMEs and outstanding balances of loans.

* Japanese version of SBIR/STTR systems: Subsidization programs for hi-tech SME start-ups.

3. Revitalization of city centres and shopping arcades

The Democratic Party of Japan will promote the concept of 窶彿ntegration of housing and businesses.窶 For instance, multi-purpose buildings will be constructed featuring shopping arcades on the ground level combined with rental homes with in-house care for the elderly in the upper floors. Shopping arcades will be rendered more attractive to consumers by adding childcare centres, and car and bicycle parking facilities. SOHO buildings (small offices for at-home work) for entrepreneurs will be utilized, and the utilization of vacant shops and land will be promoted by establishing responsible government offices. Other initiatives will be pursued, including the improvement of the urban landscape, development of disaster-response facilities and information and communication infrastructure, the transition to underground power cables, and the development of attractive barrier-free shopping arcades.ﾂ?

4. Elimination of highway tolls

With the exception of certain major urban areas, all highway tolls will be eliminated. Although enormous amounts of money have been invested in building Japan窶冱 highway systems, there remain underutilized highways. Local communities will be revitalized and distribution costs reduced through more effective utilization of these highways. The opaque Special Highway Account and public officials-led bid rigging will be investigated. A concrete plan for the elimination of tolls will be formulated, while taking into consideration environmental requirements and our vision of a comprehensive traffic system. The elimination of tolls will reduce costs. In addition, by allowing the number of on and off ramps to be increased, toll-free local highways will be reborn as traffic arteries that are integrated into the community life. Other expected benefits include an increase in job opportunities, an expansion in commuting range and a reduction in the time and cost of transportation of agricultural, animal and marine products to consumer markets, which will lead to the reinforcement of the business foundations of producers of agricultural, forestry and fishery products. To achieve this policy goal, the Democratic Party of Japan submitted the 窶廝ill for the Basic Law Concerning the Reform of Highway Projects窶 to the 159th ordinary session of the Diet in 2004. This bill outlines the basic guidelines for the elimination of highway tolls in principle, and maps out the path to a toll-free highway system. Appropriate measures will be taken to ensure employment through the creation of several corporations to be charged with responsibilities for road and highway maintenance and management.ﾂ?ﾂ?ﾂ?ﾂ?ﾂ?

5. Tourism policies founded on local revitalization

We will devise measures for revitalizing local communities by attracting tourists and creating other forms of population flows. The growing number of Asian and other foreign visitors to Japan in recent years has sparked renewed interest in promoting international tourism. It is hoped that these foreign visitors can be instrumental in furthering mutual international understanding, and in stimulating economic and consumption activities in local economies. The Democratic Party of Japan will promote the creation of more attractive towns and cities, the development of tourist and natural sites, and mountain farming villages and community forests, and support the various initiatives and undertakings of local governments and communities. Parallel to this, we will encourage the preservation and optimal utilization of local histories, traditions, cultures and natural beauty. At the same time, educational opportunities will be created for local residents to learn about them. Vacations and national holidays will be reviewed to create possibilities for more flexible vacation schedules. The staggering of holidays and the development of comprehensive traffic systems will be pursued. Furthermore, tourism policies will be promoted from the perspective of domestic and international tourists with an emphasis on developing towns and transportation facilities that contribute to preserving the natural beauty and scenery of the land.

6. Establishment of 窶廡inancial Products Supervisory Agency窶 (Japanese version of FSA)

To revitalize the Japanese economy, it is important to accelerate the flow of funds from savings to investment. This requires the development of reliable and sound markets. The Democratic Party of Japan will establish a Financial Products Supervisory Agency (Japanese version of FSA) as an independent and powerful agency responsible for overseeing transactions in a broad range of financial products. Due efforts will also be made in developing the necessary human resources.

7. Reinforcement of corporate governance

The market demands corporate disclosure and rigorous implementation of corporate audits. To ensure a system of sound corporate governance that will produce these results, enactment of a special law concerning publicly-traded companies will be considered.ﾂ?