| 18 January 2003 |
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There are three major causes of economic deadlock in Japan. The first reason is the wrongful spending of tax revenue. The second one is government and industrial circles could not respond to the change in demand from goods to services based on the change in values. The third one is that a response to the rapid aging society change is not being made, so there is no relief for peoples' insecurity in the future.
7 points of the "Economy Revival Plan"
"1. Preferentially distribute budgets for job-creating projects. For example, from improving nursery schools, group homes, to increasing the number of police officers to maintain law and order.
2. Give priority over concrete dams made under public works projects to "Green dams," mountain and forest conservation projects and to job creation in environment preservation projects.
3. Double the living space, mobilizing different policy instruments to promote the building of high quality rental houses. For example, as a social infrastructure give subsidies to rental apartments that meet certain standards and tax breaks. With the doubling of living space, the domestic consumption of furniture and other products will increase, which in turn, will lead to the promotion of care and nursing at home.
4. Implement a tax system that gives preferential treatment to investments to alleviate tax rates on cash dividends, interests and inheritance tax for risk products such as stock, bonds and investment trusts. Promote reform of the direct investment market to turn the excess cash of the elderly into small and middle size venture enterprises.
5. Abolish principles of cash subsidies to every local enterprise, changing it to comprehensive subsidies with no strings attached. In future, the role of the government will be reduced to diplomatic and defense affairs, state control enterprises will be moved to the control of local governments and financial resources distribution will be significantly enlarged.
6. Ban political donations from the companies with contracts for public works projects to prohibit golden parachuting of bureaucrats into such companies.
7. Drastically change bureaucrat-dominated budget compilation by ministries; there is a small budget committee in the Cabinet consisting of few ministers drafting the budget under bureaucratic leadership. UK principles must be a model for reform; first, based on the prospects of tax revenue, the total amount of budget (control total) must be settled, than each ministry determines its total sum and after that, distribution of the budget to every agency is decided."
( from DPJ President Naoto Kan Policy Speech at the Party Convention on January 18, 2003)
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