Prime Minister Ryutaro Hashimoto made progress Thursday in gaining acceptance for his latest proposal to set up independent government firms in five years to take over some of the state's operations, including three services under the postal ministry's control.
The leadership of the ruling Liberal Democratic Party, which Hashimoto heads, persuaded skeptical colleagues to accept his last-ditch plan to show the public that their leader's administrative reform pledges would not end up in failure.
Fierce debate is raging over whether the "kanpo" life insurance, postal savings and mail delivery services of the postal ministry should be freed from the government's bureaucratic structure.
On Wednesday, the ruling alliance, including Hashimoto's own LDP, rejected a plan to put the three services into the hands of a new government corporation. The LDP was demanding the services be kept state-run, and that further discussions on their status be put on hold for five years.
Hashimoto's Administrative Reform Council had been recommending the services be transferred to "independent administrative agencies."
The new plan is likely to be finalized today, at the earliest, during a scheduled talk between the LDP's leaders and their counterparts in the Social Democratic Party and New Party Sakigake, the ruling party's allies.
Hashimoto revealed his compromise reform plan in a meeting with Etsuya Washio, chairman of the Japan Trade Union Confederation (Rengo), the sources said. He told Washio that the postal services and printing and minting operations will be transferred to "new-type government corporations."
In addition, he said the government's forestry operations, excluding those involving environmental protection, will also move to a new government corporation, according to the sources. Hashimoto is trying to make good on his reform promises and has been pushing the ruling alliance hard to approve the last-minute compromise, which his own LDP helped force him into.