• Kyodo News


The nation’s top business lobby, the Japan Business Federation (Nippon Keidanren), urged the ruling Democratic Party of Japan on Thursday to carry out sweeping tax, fiscal and social security reforms, including a boost in the consumption levy.

Keidanren filed the request in its first round of policy talks with the DPJ since it took power 11 months ago.

It urged the DPJ to tackle the reforms on an all-party basis, business and party officials said.

DPJ Policy Research Committee Chairman Koichiro Gemba told the business leaders his party will launch discussions in early fall on simultaneous reforms to the tax and social security systems as well as fiscal reconstruction.

Gemba, who doubles as state minister in charge of civil service reform in the Cabinet of Prime Minister Naoto Kan, said he doesn’t think the DPJ’s setback in the Upper House election means voters disapprove of launching talks on hiking the 5 percent consumption tax.

In an opening speech, Keidanren Chairman Hiromasa Yonekura noted the need to strengthen corporate Japan’s international competitiveness to achieve economic growth at home.

Yonekura urged the government and the DPJ to pursue the new national growth strategy set out in June that includes a plan to create 5 million jobs and ¥123 trillion in demand in promising sectors. Yonekura called for politicians to show leadership.

Yonekura also took up environmental issues, urging the DPJ to be careful about a new environment tax, a cap-and-trade emissions-trading scheme, and a proposed renewable energy purchase program that has drawn industry opposition.

The two sides agreed to continue talks on the environmental issues, the officials said.

DPJ Secretary General Yukio Edano told the business leaders the party places priority on improving livelihoods and shares common values with Keidanren, which he said is pushing to create an more affluent and vigorous society.

Business sources said Keidanren views the Kan government more favorably than that of his predecessor, Yukio Hatoyama, who took a tough stance against big business.

Keidanren believes it will be easier to find common ground in policy with Kan, who has strong hopes of achieving economic growth and financial rehabilitation simultaneously, the sources said.

Under Yonekura, who succeeded Fujio Mitarai as head of Keidanren in late May, the business lobby plans to hold regular consultations with the ruling party, they said.

Keidanren also plans to hold similar policy talks with the LDP, the top opposition party, which lost last year’s Lower House election but had a relatively strong showing in the July Upper House poll.

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