New home affairs minister Taro Aso expressed skepticism Wednesday over the timetable put forward by Prime Minister Junichiro Koizumi to privatize the postal services entity.
Aso, former policy chief of the Liberal Democratic Party, emerged as the head of the Public Management, Home Affairs, Posts and Telecommunications Ministry following the latest Cabinet shakeup.
“Making a law (to privatize the body) is a big deal,” Aso said. “I wonder if the timetable (Koizumi has put forward) is sufficient to prepare” the envisaged legislation.
Koizumi plans to draw up a basic policy to privatize Japan Post, a public corporation that took over postal services from the government April 1, by fall 2004.
The prime minister will submit a bill outlining the privatization plan to the Diet in fiscal 2005, and hopes to completely privatize the body in April 2007.
The plan was one of Koizumi’s policy promises for the Sept. 20 LDP presidential election, which he easily won.
Some LDP politicians representing postal services interests, however, remain strongly opposed to the privatization of Japan Post.
Aso, an Upper House member of a marginal group in the LDP headed by former Foreign Minister Yohei Kono, avoided directly stating his opinions on the privatization of Japan Post.
Japan Post’s key business areas are mail delivery, postal savings and “kampo” life insurance.
Aso deflected a question over whether he supports the privatization of Japan Post by responding that he is considering three points: whether the privatization is beneficial to the public, what impact it will have on the roughly 280,000 employees of Japan Post, and that the privatization issue is one of Koizumi’s policy promises.
“It would be meaningless if privatization does not produce any merits for the people,” he said.
While the central and local governments’ financial situations have been deteriorating amid the nation’s decade-long economic stagnation, Koizumi has been pushing the so-called Trinity Reform package to review national and local-level finances.
The plan, unveiled earlier this year, is based on three pillars.
It calls for national subsidies to local governments to be reduced by around 4 trillion yen by fiscal 2006. The central government currently provides about 20 trillion yen each year.
Subsidies to be cut include those for public works, along with personnel costs for staff at public elementary and junior high schools.
At the same time, the national government will transfer some of its tax revenue resources to local authorities, giving them more power to collect taxes.
The central government would then review its tax grants to theses authorities in line with the power shift in tax collection.
Aso said the nation needs to discuss further which subsidies will be cut and which tax revenue resources should be transferred.
“We can’t simply cut any subsidies,” Aso said.
The government must win public understanding in its drive to promote the reform agenda, he said.
The reform could widen the gaps between local governments because sparsely populated municipalities might be forced to respond to the cuts by lowering the quality of public services, he said.
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