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On June 21, Prime Minister and DPJ President Naoto Kan held a press conference at the Prime Minister’s Office following the end of the Diet session. In response to a reporter’s question regarding the consumption tax, he stated, “I said that I would like to start nonpartisan discussions [on this issue] at an early stage. It is a mistake to take this to mean that consumption tax will be raised soon after the House of Councillors election. In fact, my election pledge could be taken as promising to start the debate.”
Kan added that if multiple tax bands were introduced in order to mitigate the regressive nature of the consumption tax, an invoice system would be needed, and moreover, if a system of tax refunds was to be introduced, a taxpayer’s identification number system would be needed. Consequently, he said, implementation of fundamental reform of the tax system, including consumption tax, “would take 2 or 3 years or more, at the very earliest”.
At the start of the press conference, Kan said, “I would like to respond to the wish of former Prime Minister Hatoyama and to do what needs to be done to restore the confidence of the Japanese people.” He then went on to communicate directly to the nation the basic measures that the Kan Cabinet intended to proceed with from now on.
Firstly, Kan emphasized that the basic policy direction of his Cabinet was to break free of the economic and social impasse that had continued for the past 20 years, and restore vitality to Japan, and said that in order to achieve this, they would exert strong political leadership in order to realize “a strong economy”, “robust public finances” and “a strong social security system”.
Kan said that the Cabinet had decided on a New Growth Strategy in order to achieve this goal, and went on to introduce one part of this strategy. He stated that the government aimed to realize economic growth at an average nominal rate of 3%, and real rate of 2%, by 2020, as well as unemployment levels at around the 3% mark.
Furthermore, he said that they also intended to engage in returning Japan’s primary balance to the black by 2020, and to start discussions relating to fundamental reform of the tax system following the House of Councillors election.
With regard to foreign policy, Kan said that he would hold meetings with the leaders of the US, China and Russia at the G20 summit starting on June 25, and while working to create relationships of personal trust, would explain his government’s plan to rebuild Japan’s public finances (simultaneously producing economic growth and strong public finances), and he would be interested in hearing the opinions expressed by other nations regarding this matter.
In response to a reporter’s question regarding the reduction of the burden placed by US bases on Okinawa, Kan answered, “I will tackle this issue with the stance that we would also like to ask for the cooperation of the United States.”
A reporter asked why a reference to videotaping prosecutors’ interrogations of suspects had been included in the Manifesto for last year’s general election but was not included in the current Manifesto, Kan replied that the general election Manifesto was the basis for the administration’s policies, and if there was no particular revision to a policy measure, the general election Manifesto would apply.
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