Posts chief cautious on future of public entity

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Whether to eventually privatize the public postal corporation that is to be launched next spring should be left to future public debate, said Toranosuke Katayama, who has been reappointed as head of the Public Management, Home Affairs, Posts and Telecommunications Ministry.

In an interview, Katayama, an Upper House member from the Hashimoto faction of the ruling Liberal Democratic Party, avoided directly stating his opinion on privatization. The politically sensitive issue — the fate of the new public corporation taking over the postal services — has been one of contention between LDP lawmakers with vested interests and Prime Minister Junichiro Koizumi, the party president.

Koizumi considers the launch of the public corporation a milestone in his long-cherished goal of privatizing the postal services, while LDP politicians representing the interests of post offices strongly oppose the idea.

“The future form of (the postal services) should be decided through national debate,” said Katayama, a former high-ranking bureaucrat at the Home Affairs Ministry.

Whatever body will take over the postal services, it should maintain the same level of service at uniform rates throughout the country and a nationwide network of existing post offices, Katayama added.

“The network of post offices, which has been built over 130 years, is an asset of the nation. They would lose their meaning should the network be torn up,” said Katayama.

Currently, post offices provide three main services — postal delivery, savings and insurance.

But new missions can be added to utilize the national network, such as handling various residential documents on behalf of understaffed municipal governments, Katayama said.

The ministry Katayama heads is also pushing for mergers of municipalities, setting a target to reduce their number from the current 3,300 to about 1,000.

Katayama said the 1,000 target may be difficult to achieve, but the number will fall below 2,000. A special law is in effect through March 2005 to promote municipal mergers through fiscal incentives.

To give local governments a more solid fiscal footing, the ministry is now finalizing a set of plans to cut subsidies and tax transfers from the national to local governments, so municipalities will have more tax revenue sources of their own.

Katayama said the ministry plans to hammer out a more detailed timetable for such reforms by next summer.

Katayama pointed out that currently the Osaka Prefectural Government annually receives as much as 330 billion yen in tax transfer from the national government, while Kanagawa Prefecture receives 160 billion yen a year.

“Now local governments couldn’t get by unless they receive hundreds of billions of yen. I believe the current fiscal structure of local governments is wrong,” Katayama said.