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  • Policy Speech of Mr. Toshimitsu Motegi, Minister of Economy, Trade and Industry, Minister of State for the Corporation in support of Compensation for Nuclear Damage, Minister in charge of Nuclear Incident Economic Countermeasures, and Minister in charge of Industrial Competitiveness

Policy Speech of Mr. Toshimitsu Motegi, Minister of Economy, Trade and Industry, Minister of State for the Corporation in support of Compensation for Nuclear Damage, Minister in charge of Nuclear Incident Economic Countermeasures, and Minister in charge of Industrial Competitiveness

March 19, 2013
Committee on Economy and Industry, House of Councillors

Before the discussion in the Committee on Economy and Industry at the 183rd Session of the Diet, in my position as the Minister of Economy, Trade and Industry, Minister of State for the Corporation in support of Compensation for Nuclear Damage, Minister in charge of Nuclear Incident Economic Countermeasures, and Minister in charge of Industrial Competitiveness, I would like to talk about several issues surrounding the economy and industrial administration, as well as our future efforts.

Two and a half months have passed since the inauguration of the Abe Cabinet, and Japan's economy is beginning to show signs of recovery. What the Japanese people are expecting from the new government is, first and foremost, that we achieve economic recovery and revitalization. Consequently, the government will use a "three arrows approach" to simultaneously and powerfully implement bold monetary easing, a flexible fiscal policy, and a growth strategy that encourages investment in the private sector.

The FY2012 supplementary budget for the Ministry of Economy, Trade and Industry (METI) and related measures amounted to 1.2 trillion yen, one of the largest ever, representing an economic policy approach that is of a different dimension compared with previous measures. Specifically, the supplementary budget is composed of five pillars: Encouragement of private sector investment; economic revitalization through research and development and technology development investment; supporting small and medium-sized enterprises (SMEs) and micro enterprises; supporting global business expansion, and; disaster prevention and post-earthquake reconstruction measures.

Together with this supplementary budget, seamless measures are also included in the initial budget proposal for FY2013. Specifically, support for research and development in the area of the materials industry is reinforced, towards the revival of Japan's manufacturing industry. There is also an emphasis on a group of measures to support the commercialization of technologies and services that have strong potential, including the medical and nursing care industries and industries related to the Cool Japan Strategy, as well as measures focusing on micro enterprises that prop up regional economies. Through these budgetary measures, we will strengthen the trend toward economic recovery and revitalization.

Regarding the FY2013 tax reform, we will take bold measures that contribute to economic revitalization by stimulating demand and encouraging private sector investment, including the creation of a tax system that facilitates investment and the considerable expansion of tax cuts for research and development. At the same time, we will tackle the challenge of economic revitalization through both budgetary measures and tax reform, including a review of the automobile acquisition tax and the business succession tax system.

What we will need to do from now on is put into practice the third of the "three arrows," the growth strategy, even more strongly. Professor Junichiro Kawaguchi, manager of the Hayabusa Project in JAXA, says: "You cannot look on a new horizon unless you build a tall tower." Upon mapping out the growth strategy, the government will be taking a new approach for policy formulation. First, a "tall tower," to show us what kind of society we are creating; in other words, a "new frontier" will be shared among the public and private sectors, and then the businesses we need and the core technologies to support them will be incorporated in a multilayered manner. The government will identify strategic fields through discussions in the Industrial Competitiveness Council, and once the goals and targets are determined, we will devote all available policy resources in all the areas of industry, academia and government, including budgetary measures, tax measures, regulatory reforms and support in the area of intellectual properties. This is the strategic market creation plan.

Further, in order to turn incipient hopes about the future of Japan into unwavering belief, we need to cast aside the deflation mindset that has engulfed the country, and to fire up the engine that drives people, goods and money and gives us a good revving up. To do this, it is necessary to facilitate the renovation of industry in a proactive and strategic manner, including by activating entrepreneurship and the starting of new businesses, by rebuilding businesses and restructuring industry, and by creating global companies whose strong international competitiveness makes them indispensable to the world economy. Further, the high-cost domestic structure that is becoming a constraint for Japanese companies in global competition should be corrected, with the aim of making Japan the best country in the world for companies to do business in.

In particular, we need to create an environment in which SMEs and micro enterprises, which underpin the foundation of Japan's economy, are able to move at full throttle. Micro enterprises, accounting for about 90% of SMEs, have a vital role in Japan's regional economies. In order to support the business activities of these micro enterprises, the Bill to Partially Amend the Small and Medium-sized Enterprise Basic Act to Revitalize Business Activities by Micro Enterprises will be submitted during the current session of the Diet.

Along with improvement of the domestic environment, it is also essential for Japan's future growth to incorporate the benefits of growth overseas, especially in the Asia-Pacific region. Keeping that in mind, the Government will further accelerate negotiations on economic partnerships with other countries and regions, including a Free Trade Agreement (FTA) among Japan, China and the Republic of Korea, the RCEP (Regional Comprehensive Economic Partnership) and the Japan-EU EPA.

On Friday, March 15, Prime Minister Abe announced that Japan will participate in Trans-Pacific Partnership (TPP) negotiations. Although public opinion has been divided regarding this important issue, the Prime Minister made the decision based on a far-sighted plan for the country, and the Government and ruling parties will be uniting their efforts to achieve results that contribute to Japan's national interests in the negotiations.

At the same time, we need to actively develop overseas markets, mainly focusing on emerging economies, by combining the efforts of both the public and private sectors. Specifically, we will strongly support the export of Japan's advanced infrastructure systems and service industries, and the overseas expansion of SMEs and middle-scale enterprises. Further, the Bill on the Act on the Establishment of the Japan Brand Fund was submitted during the current session of the Diet. This bill is for supporting the active overseas expansion of appealing aspects and content of Japan that we are proud of, including traditions, fashions, and cuisine, in terms of financial and human resources. The Government will support tough and proud Japanese business people.

The recent launch of a missile and the nuclear test just recently conducted by North Korea were absolutely unacceptable. Approval for a complete ban on North Korean imports and exports that was implemented last year is being requested in the current session of the Diet. The Government will show Japan's resolute stand through such measures.

Ensuring a stable supply of energy at a low cost is absolutely vital to Japan. We as a nation overcame the two oil crises we faced in the 1970s by improving our energy efficiency and developing energy saving technologies and products. Through this, we established one of the most energy-efficient societies in the world. Now, following the Great East Japan Earthquake, Japan is currently facing new types of energy constraints. The government is determined to face this head-on, and work to once more build the world's most advanced country in terms of energy taking advantage of various supply systems and intelligent consumption behaviors.

What forms the core for the reform towards overcoming energy constraints is electricity system reform. This is a major reform of historic proportions, which fundamentally reviews the regional monopoly system that has continued for six decades since the end of the World War II. The points of the reform are: facilitation of the liberalization of the electricity market, enhancement of the neutrality and independence of the transmission and distribution divisions, and the expansion of wide-area electrical grid operation. This reform will further drive the steady supply of low cost electricity through measures such as encouraging new entrants and creating a sound competitive environment. With the basic stance of steadily implementing bold reforms, the Government will submit the Bill to Partially Amend the Electricity Business Act at the current session of the Diet. With respect to requests by electric utilities to raise electricity rates, the Government will look into whether such requests have been preceded by the greatest possible increase in management efficiency, taking into consideration neutral and objective reviews by the Expert Committee on Reviewing Electricity Rates.

In the area of renewable energy, the Government will steadily manage the feed-in tariff system. In addition, taking the limited availability of suitable locations for wind power generating facilities into consideration, we include costs for the development of regional electricity distribution networks and the demonstration of technology to control voltage fluctuation of the distribution networks in the initial draft budget for FY2013. In energy conservation, the Bill to Partially amend the Act on the Rational Use of Energy, which expands the scope of the Top Runner Program that currently covers automobiles and consumer electronics so that it also covers building materials such as walls and windows in order to raise the level of the heat insulation capacity of residences and other buildings, has been submitted to the current session of the Diet.

Based on lessons from the accident at Tokyo Electric Power Company's Fukushima Daiichi Nuclear Power Station, "safety first" must be upheld as the primary principle in deciding whether or not to allow the restart of nuclear power stations. Decisions as to the safety of nuclear power stations should be left to the expert judgment of the Nuclear Regulation Authority (NRA). No nuclear power stations will be allowed to restart unless they are recognized as safe by the NRA. Conversely, if nuclear power stations are recognized as safe by the NRA, the Government will respect that judgment and allow them to restart. Further, based on the reflections of approaches so far, the Government will make the necessary reviews regarding the selection process for disposal sites for the final disposal of high-level radioactive waste, without postponing the issue.

In order to ensure a stable supply of resources at a low cost, the Government will put its utmost efforts into the diversification of supply sources, including making the import of LNG from North America a reality, by strengthening Japan's relations with resource-producing countries through active resource diplomacy, and by supporting Japanese companies' acquisition of foreign resource interests through the provision of risk money by JOGMEC. At the same time, we will aim for a reduction of power generation costs through measures such as improving the efficiency of thermal power generation.

The Government will also promote countermeasures against global warming, a closely related issue that is indivisible from energy policy.

Lastly, reconstruction following the Great East Japan Earthquake is the most important mission for METI, as well. We must securely push forth the location of new business facilities and the reconstruction of businesses by effectively utilizing subsidies for the location of new business facilities and grouped subsidies.

In Fukushima Prefecture, about 160,000 people are still evacuees. The Government will unite its efforts in accelerating reconstruction by thoroughly accommodating the needs of those affected by the disaster, so that residents can return home as early as possible. Specifically, the Government will aim to complete its review of the two remaining areas to which evacuation orders have been issued through coordination with local people. Further, in order to accelerate the decommissioning of the reactors at Tokyo Electric Power Company's Fukushima Daiichi Nuclear Power Station, the Government will take a leading role in supporting research and development. In addition, we will also take all measures possible to ensure prompt and appropriate compensation by Tokyo Electric Power Company.

Japan is currently facing an unprecedented number of challenges, including economic revitalization, restoration of international competitiveness, overcoming of energy constraints, and reconstruction following the Great East Japan Earthquake. The Government will work at these reforms with the determination that "while nature and the past cannot be changed, society and the future can." I am looking forward to hearing a broad range of opinions, and would like to thank the committee members in advance for their understanding and cooperation.

Last updated:2013-04-24
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