Noda vows to revive economy through social security, tax reforms

Kyodo

Prime Minister Yoshihiko Noda expressed his resolve in a New Year address Sunday to implement reforms in Japan’s social security and tax systems in a bid to help revive its economy.

His address comes two days after his government approved a draft plan for the social security and tax reforms, including doubling the consumption tax rate in two stages to 10 percent by 2015, to finance swelling welfare costs in rapidly aging Japan.

“We must move into high gear in tackling the difficult challenge of achieving both fiscal rehabilitation and economic growth,” Noda said, noting the need to improve the sustainability of the social security system.

“It is our responsibility to future generations to maintain fiscal discipline while protecting national credibility,” he said, reiterating that his government will work on securing nontax revenues and achieving expenditure cuts.

Noda, who assumed office in September, also vowed to tackle other issues that require immediate attention such as the nuclear crisis at the Fukushima Daiichi power plant triggered by the March 11 earthquake and tsunami.

In November, Japan’s parliament enacted a 12 trillion yen third extra budget for fiscal 2011 designed to additionally finance work to restore disaster-hit areas. In December, the government announced that the Fukushima plant is now in a stable state of cold shutdown.

“Spearheaded by our new reconstruction agency, we will significantly speed up the rebuilding of disaster-hit areas and the revival of Fukushima (Prefecture),” Noda said, referring to the creation of a new agency that will play a pivotal role in post-disaster rebuilding.

The premier also said Japan will also keep an eye on developments in North Korea following leader Kim Jong Il’s sudden death in December.

With 2012 being a year in which the leadership in major countries could change, Noda said the international situation is “unpredictable” and vowed to fulfill his prime responsibilities to ensure Japan’s security.

In 2012 presidential elections are due to take place in France, South Korea, Russia and the United States. Chinese Vice President Xi Jinping is also tipped to become the country’s next leader.