Public Policy Planning & Consulting Co. (SEISAKU-KOUBOU) is a public policy consulting firm based in Tokyo, covering broad policy areas such as economic policy, fiscal policy, regulatory policy, administrative reform, international trade and investment, etc.
PPPC provides consulting and briefing services to the clients in the central/local governments, Diet, local assemblies and the private sector.

This blog is aimed at providing general information, latest updates and some of our analytical reports about Japan's public policy in English.
The contents include;
- updates on some important government councils, especially those in which our executive officers serve as the members,
- weekly reports on latest news in Nagata-cho, the political center in Japan, (partially).
- analytical reports and articles by our members and distinguished experts outside the firm,(partially).


This Week’s “Nagata-cho” (27.Aug- 3.Sep, 2013)

 The government on August 31 finished all the meetings to study the
possible impacts of the scheduled sales tax hike to 8% in April 2014
to the national economy and peoples lives.
 Under legislation enacted last year, the government plans to raise
the consumption tax from 5 percent at present to 8 percent next April
and to 10 percent in October 2015 to pay for growing welfare costs.
And the Abe administration has been carefully studying the possible
negative impact of a consumption tax hike on the nascent economic
recovery, amid concern it could weigh on business investment and
household spending.

Council on Economic and Fiscal Policy, Intensive meetings
 (Japanese only)

 During the six day hearings to about 60 experts from Aug 26, more
than 70 percent of the experts, including economists and business
leaders, expressed support for the plan, with most urging the
government to take steps to prevent the economy from slowing, such as
compiling an extra budget or reducing other taxes. Some attendants
said a sales tax hike is necessary for the assuring the revenue for
the social securities including child-rearing and livelihood
protection, and others requested the government to introduce a reduced
tax rate over the daily goods like food as countermeasure to the
low-income brackets when the sales tax rate is to be hiked to 10%.
Toyota CEO requested an abolishment of the vehicle weight tax and car
sales tax.
 But other experts at the hearings ? including two economic advisers
to Abe ? were opposed to the scheduled tax increase, saying the prime
minister should consider revising the plan and focus on beating
chronic deflation.

 Akira, Amari, economic and fiscal policy minister, compiled and
submitted a report on the result of the hearings on September 3. Prime
Minister Shinzo Abe will announce whether to raise the tax after
examining the results of the next Bank of Japans tankan business
sentiment survey due out October 1, the Ministry of Finances
quarterly corporate statistics released on September 2, the revised
growth figures for the Apr-June quarter to be released September 9,
and other economic indicators before making up his mind in early
 While Amari and Finance Minister Taro Aso share the view that the
environment is ripe for a tax hike, Aso is passive on the economic
stimulus and supplementary budget as countermeasure to the tax-hike
whereas Amari criticizes such an attitude by Aso and the MoF.

 In the ruling Liberal Democratic Party, there are as diverse views on
the tax-hike and some lawmakers request the executives to hold
hearings as arena for intraparty discussions. Yet, as the tax-hike was
put into legislation due to the trilateral agreement by LDP, its
coalition partner New Komeito and then-ruling Democratic Party of
Japan last year, many do not desire putting the issue back on the
table. Also there is a concern for a political gridlock in the autumn
Diet session in case Abe postpones the tax-hike. As LDP plans to
submit a bill for industrial competitiveness as part of the growth
strategy in the Abenomics, a bill to establish Japanese version of the
National Security Council and a revised act on the power industry in
the next session and other important bills, the LDP lawmakers have
pressured Abe into deciding a tax-hike as scheduled.

 August 30 was the deadline for budgetary requests by the central
government ministries for FY 2014 to the MoF. The total request in the
general account amounted to 99.2 trillion yen and exceeded 100
trillion yen combined with the disaster-related budget for the
straight two years. The policy expenses amounted to 74 trillion yen,
mainly caused by the naturally-growing costs for the social security,
the enlarged public works projects, national defense and
infrastructure works largely demanded by each ministry. Among them,
Health and Labor Ministry requested the record 30.5 trillion yen, and
Land and Transport Ministry requested 5.8 trillion yen.
 Meanwhile, the special government bond has increased to 25.28
trillion yen, adding 3.1 trillion yen from this years initial budget.
As the Cabinet had requested the ministries to reduce at least 10% of
the budget as ceiling and also had pledged internationally to cut 8
trillion yen in two years, the policy expenses will have to be
compressed by at least 2 trillion yen.
 Toward a compilation of the initial budget FY 2014, it is likely that
the MoF, other ministries and the LDP lawmakers will heat up battling
over the budget allocations. Further, the pressure toward budget
allocation will be accelerated by the idea to form a large-scale
economic stimulus in the next years supplementary budget.

 On August 29, LDP and Komeito agreed to discuss taxation reform to
promote investments in ventures and industrial reformation. LDP held a
subcommittee on the same day to discuss a corporate tax reduction and
investment tax reduction, and plans to reflect the idea into the
industrial competitiveness legislation which the Cabinet plans to
submit in September. Yet, as the reregulation will likely repel the
industries and ministries, it is to see to what extent of reforms LDP
can finally propose.
 At the same time, Abe Cabinet resumed operation of the governments
Industrial Competitiveness Council which has been suspended since it
released the growth strategy in June to start discussions on a tax
reduction to promote investment and the industrial competitiveness
bill. Abe will seek stepping into reforms of the bedrock
regulations in the fields such as the agriculture, medical care and

 On August 30, LDP, Komeito and DPJ agreed to hold a meeting by the
secretary-generals to discuss the Lower House electoral system, the
Diet reforms and social security reform in early September. While the
ruling coalition intends to appeal to the public that the lawmakers
are coping with these topics over the partisan confrontation, DPJ will
cautiously see the prospect of the meeting for a discontent that its
proposals on the social security reform were postponed and the
tax-hike alone has been passed into legislation. The three parties
will have a meeting sometime next week.

 Lots of attentions have been paid to Abes announcement on his
decision whether to increase the sales tax. While Abe will attend the
G20 summit meeting on September 5-6 in St. Petersburg, Russia, and
explain his economic policy, it is not likely that Abe will give
specific remarks on the tax-hike there. Still, to see the prospect and
proceeding of the discussions carefully, Abes speech in the G20
requires careful attentions, it seems.

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