Newly appointed Economy, Trade and Industry Minister Akihiro Ohata believes Japan needs to pull out all the stops to boost its economy, including drafting an extra budget, lowering corporate tax and forging more economic partnership agreements with other countries.
“Just as our economy was recovering from the effects of the fall of Lehman Brothers, we’ve seen the yen’s sharp rise against the dollar. A sense of uncertainty for the future is growing, and (the exchange rate) has greatly damaged the export industry,” Ohata said during an interview with media organizations Wednesday.
“We will do everything that needs to be done,” said Ohata, a veteran Democratic Party of Japan member, who is in his seventh term as a Lower House lawmaker.
The government is expected to submit an extra budget for fiscal 2010 to the upcoming extraordinary Diet session in October. While noting that the extra budget is necessary, Ohata stressed the importance of implementing other measures, particularly lowering the corporate tax rate and signing EPAs with more countries.
Ohata would like to cut corporate tax by at least 5 percent. The 40 percent corporate tax rate is often considered too high compared to levels in other countries, and some critics say it is undermining the competitiveness of Japanese companies and preventing foreign firms from coming to Japan.
At a study session involving all Cabinet ministers on Sept. 20, Ohata told them that “the time has come to carry out a corporate tax cut by at least 5 percent,” to which some ministers responded that 5 percent is not enough, he said.
He added that a reduction of at least 5 percent should be included when compiling the fiscal 2011 budget.
Regarding the promotion of EPAs with other countries, Ohata said it will be important to work closely with the farm ministry, since EPAs would allow cheap agricultural products from overseas to enter the domestic market and possibly hit the nation’s farmers.
He said the two ministries will jointly form a team to discuss an EPA strategy and how to develop systems for the domestic agriculture industry to grow simultaneously.
Widening Japan’s EPA partners will also be good for the country’s export industry, as it will ease tariff barriers, he said.
“It is crucial to improve an environment in which Japanese firms have been more shackled than overseas companies” by promoting a corporate tax cut and EPAs, Ohata said.
An engineer with Hitachi Ltd.’s power plant design team before entering politics, Ohata also said he plans to promote Japan’s nuclear plants for overseas infrastructure sales. He said this will involve visiting other countries to promote Japan’s plants, which he said are “the safest in the world.”