Koizumi resumes reform drive in Diet policy speech

by Reiji Yoshida

Prime Minister Junichiro Koizumi relaunched his reform offensive Monday, vowing to “boldly scale down” government by privatizing the postal services, cutting personnel costs and reforming state-backed financial institutions.

However, in his policy speech to the special Diet session, he offered neither numerical targets nor a timetable to guide his renewed pledge for small government. Instead, he focused on his plan to privatize the giant state-run mail, postal savings and insurance institution. He began by repeating his vow to slash the number of government workers.

“I will review their salary structures and set a net-reduction target for the number of state government workers,” Koizumi said during his address to the Diet. “I will boldly scale down the size of the government by implementing structural reforms like these.”

Koizumi’s ruling Liberal Democratic Party won big in the Sept. 11 general election by campaigning on the theme of reform. In the wake of their stinging defeat, the opposition parties are also now attacking “inefficient” government workers and services and calling for restructuring.

Koizumi also touched on diplomacy, merely repeating earlier stated polices and offering no new strategies toward Iraq and North Korea.

Due to the limited agenda, the 11-minute speech turned out to be Koizumi’s shortest since taking office in April 2001 and the second-shortest in postwar Japan, according to one of his deputies.

On extending the Self-Defense Forces humanitarian mission in Iraq beyond December, Koizumi only said he will decide after carefully examining requests from the Iraqi people, the international situation and the SDF’s working conditions.

Tokyo will explore ways of normalizing relations with North Korea after resolving the Pyongyang nuclear arms and missile threat and its abduction of Japanese nationals, Koizumi repeated.

He plans to field questions about his policies from the other parties at plenary sessions Wednesday and Thursday.

Earlier in the day, the Cabinet adopted a set of revised bills to incorporate the state-run mail delivery, postal savings and postal insurance units into four entities plus a state-linked holding company starting in October 2007.

The contents of the bills are the exactly the same as the original bills scrapped by the House of Councilors last month.

But the day for starting privatization was pushed back by six months from April 1, 2007, the date prescribed in the aborted bills.

Koizumi aims to gain Diet passage of the postal bills by Nov. 1, when the session ends, but executives of the ruling bloc — the LDP and New Komeito — have said they want to have the bills passed by both chambers by mid-October.

With both the House of Representatives and House of Councilors dominated by proprivatization lawmakers, passage of the bills now appears certain.

The postal services control around 330 trillion yen in deposits in postal savings and insurance. Privatization would turn it into the world’s largest bank.