Last week on March 28, Prime Minister Shinzo
Abe proposed numerical
targets of implementing the budget FY
2014 in order to minimize
possible negative impacts of the
consumption tax hike from 5% to 8%
from April 1 to the country’s economy to all the ministers. The
subject of numerical targets is the 12
trillion yen including public
works projects. Abe requested that 40%
of spending will be completed
by the end of June and 60% be undertaken
by end-September.
Regarding the fact that there are concerns
that the tax-hike will
hamper individual consumptions and slow
down the country’s nascent
economic recovery once again, while
Prime Minister Abe admitted on
March 31 in the Upper House Audit
Committee that the tax-hike might
have damages to the economy, he stressed
that he would make all-out
efforts to drive the economy onto growth
as early as in July by
alleviating negative influences with the
5.5 trillion yen of the
supplementary budget and quick spending
of the initial budget for this
fiscal year. Chief Cabinet Secretary
Suga also stated in a press
conference that the Cabinet would make
every effort on economic
measures that will prevent the economy
from declining.
The upcoming challenges the Abe Cabinet will
face include minimizing
and overcoming negative economic impacts
likely to be caused by the
tax-hike and swiftly putting into place
the growth strategy, including
revision of the growth strategy to be
released in June. In particular,
it is vital for the Cabinet to break
through the country’s regulatory
regimes which are often likened to solid
bedrocks due to persistent
opposition from related industries and
ministries, and to expand
created operational plans nationwide.
On March 28, a government panel chaired by
Prime Minister Abe selected
six areas as the National Strategic
Special Zones where regulations
will be eased. The designated zones are
the Tokyo area, covering Tokyo
and Kanagawa Prefecture as well as
Narita, Chiba Prefecture; the
Kansai area, covering Osaka, Kyoto and
Hyogo prefectures; Niigata;
Yabu, Hyogo Prefecture; Fukuoka; and
Okinawa Prefecture. In the Tokyo
zone, the metropolitan government is
expected to ease restrictions
such as the ratio of total floor space
to plot size near central Tokyo
stations to improve international
competitiveness of the nation’s
capital. Narita is expected to
collaborate with a university to create
an “international medical department” in a bid to turn the city into
one of the best medical service bases in
the world. In the Kansai zone,
the government expects the city of Osaka
to develop a hub for medical
innovation, including regenerative
medicine centering on induced
pluripotent stem cells. The details of
these two metropolitan economic
zones will be considered further.
Meanwhile, Niigata and Yabu are
considering shifting part of their
administrative work, currently
overseen by local agricultural
committees, to their city governments
to promote the use of farmland. Fukuoka
proposes to establish a labor
support center to help solve
labor-management issues with the aim of
making it easier to do business in the
city, particularly for foreign
companies. Okinawa Prefecture is likely
to work on deregulation of
factors such as medical practices by
foreign doctors and the tourism
sector.
The government intends to obtain Cabinet
approval for the
designations based on the National
Strategic Special Zones Law in
April. It plans to set up a steering
group for each special zone,
comprising representatives of central
and local governments, and
companies, to devise deregulation
projects. The special zones are
expected to go into operation this
summer.
*The state of deliberations in both
Houses and committees are
available from the following
websites.(Japanese only)
House of Representatives Internet TV：http://www.shugiintv.go.jp/en/index.php
Live broadcasts and video recordings of the
deliberations in the
House of Councillors ：http://www.webtv.sangiin.go.jp/
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