Economy, Trade and Industry Minister Takeo Hiranuma proposed a 15-point plan Friday to increase jobs and markets, including optimizing research outcomes at universities to create business opportunities in the private sector.
In the plan, Hiranuma targeted a 10-fold increase in the number of patents obtained by universities within 10 years, while expanding to 1,000 firms in three years the number of venture businesses originated from universities.
The proposal was made at the first meeting of the state task force aimed at coping with industrial structural reforms and employment. The team, led by Prime Minister Junichiro Koizumi, includes all Cabinet ministers.
The task force aims to create jobs and expand markets to counteract the expected increase in unemployment resulting from the disposal of problem loans and assets held in the financial and industrial sectors. It will hold discussions based on the proposal — to be finalized in September — and compile a midterm report at the end of June.
The proposal consists of two parts: creation of new businesses and reform of the current employment system, according to the officials.
As well as facilitating venture businesses, the plan proposes the creation of efficient and competitive medical and health services and promotes private sector entry into the provision of child-care services.
The plan also proposes a review of the current employment system, allowing flexible working styles, such as fixed-term employment.
Last plot up for sale
The Finance Ministry was poised Friday to announce that it will hold an auction Sept. 17 to sell a plot of state-owned land on which the main building of the Defense Agency formerly stood, ministry officials said.
The 78,400-sq.-meter site is located in Roppongi, one of Tokyo’s busiest areas, and is the last large-scale plot of national land remaining in the capital, the officials said.
According to estimates by private real estate companies, the land will sell for between 100 billion yen and 150 billion yen, and is expected to fetch one of the highest prices ever for a piece of state-owned land.
The ministry hopes the sale will enhance state efforts to redevelop urban areas.
Noting the ministry will sell the land as one unit, the officials said that, ideally, a complex combining residential and business facilities should be built on the site, in line with the wishes of the Tokyo Metropolitan Government.
They said the proceeds from the transaction will be used to repay debts incurred when the Defense Agency’s main building was relocated to a different area in Tokyo.
Sales tax hike eyed
Finance Minister Masajuro Shiokawa suggested Friday that the government would increase the consumption tax around 2003 to 2004 if the economy rebounds.
“We would like to consider a review of the taxation system, including that of the consumption tax, in two to three years’ time,” Shiokawa told the House of Representatives Financial Affairs Committee.
But he emphasized that economic recovery is a prerequisite for any tax increase, saying, “The economy will not acquire the strength to deal with a tax increase over the next one to two years, judging from the weakness of personal consumption.
“We would like to set in motion in two to three years” a reconstruction plan for attaining what economists call a “primary balance,” he said.
A primary balance refers to the fiscal state in which government expenditures — excluding bond-servicing costs — equal revenues, from which proceeds from bond issues are deducted.
When the government can start considering a tax increase, it will eye raising such taxes as inheritance tax, gift tax and consumption tax, Shiokawa said.
If the consumption tax is increased, “it would make it possible for the government to boost the percentage of state revenues from indirect taxes” in overall state revenues, he added.
Road funds reassessed
Finance Minister Masajuro Shiokawa said Friday that he will study whether auto-related tax revenues earmarked for road construction can be used for other purposes, including social welfare spending.
Shiokawa said road-building funds will be used for social welfare purposes if they are integrated into the budget’s general account — a move pushed by Prime Minister Junichiro Koizumi.
“I have been ordered by the prime minister to study expanding the use of the funds,” he said, adding, however, that the expanded use of the funds will probably not come about during the next fiscal year.
“As we have to consider opinions in the Diet and the Liberal Democratic Party, we will fully study when and how we should carry out the plan,” he said.
Koizumi said in an interview Thursday with CNN that he wants to expand the use of the revenues as part of his crusade to reform the country’s deficit-ridden finances.
Heizo Takenaka, state minister in charge of economic and fiscal policy, voiced support for the idea and expressed hope that the Council on Economic and Fiscal Policy will sketch a broad framework to this end.
“The ultimate purpose of (fiscal) reforms is making them (the road-specific revenues) available for general purposes, but expanding their use partially for the time being is an option,” Takenaka told a news conference.
But the proposal has met strong opposition from influential LDP members, particularly from those who have strong connections with the construction industry.
Many prefectural governors are also against the idea.
LDP execs give OK
The Liberal Democratic Party’s Executive Council on Friday approved reviewing the controversial road-building funds, an initiative of Prime Minister Junichiro Koizumi.
But some lawmakers voiced concern about recent remarks by Koizumi and Finance Minister Masajuro Shiokawa on the use of the funds.
Koizumi and Shiokawa said they want to expand the use of gasoline taxes and car taxes beyond road construction.
“(Shiokawa) is making remarks that deviate from party policy,” said Muneo Suzuki, a member of the Executive Council. “He should not give a go-ahead without first consulting with the party.”
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