New Prime Minister Naoto Kan on Tuesday reiterated his intention to work toward restoring Japan’s fiscal balance, stressing in his inaugural remarks that the economy’s plunge in recent years was the result of steering clear of tax hikes and relying too much on government bonds.
Kan, who served as finance minister and deputy prime minister in the previous administration, has indicated in the past the need to raise the consumption tax to restore the nation’s fiscal coffers.
The growing deficit is “rooted in a structural cause,” Kan said in his first news conference, adding that lack of political leadership in the past two decades triggered the downward spiral.
“We ballooned our debts and allocated the money in ineffective public works,” he said.
Kan vowed to prop up the economy by promoting measures to curb global warming as well as creating stronger business ties with other parts of Asia.
Asked how his Cabinet will differ from that of Yukio Hatoyama’s, Kan said Chief Cabinet Secretary Yoshito Sengoku will be a key player on his team.
“A chief Cabinet secretary must be someone who at times tells the prime minister not to do something,” Kan said, in effect criticizing Sengoku’s predecessor, Hirofumi Hirano, for failing to support Hatoyama.
“Mr. Sengoku has been my friend for a long time, but he is also an uncomfortable figure for me,” he joked. “But having a strong chief Cabinet secretary is the first step in creating a sense of unity within the administration.”
On other matters, Kan acknowledged the government will probably not be able to pass the postal reform bill by the June 15 end of the Diet session, thus implying an extension to the legislative session.
Kan said the United States will remain the cornerstone of Japan’s foreign policy, and he intends to follow through with the agreement reached last month with Washington to relocate U.S. Marine Corps Air Station Futenma within Okinawa.