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).

12.24.2014

Those who do not appreciate the increased employment and decreased bankruptcy

(TAKAHASHI Yoichi, PPPC Chairman)


The first and second arrows of the Abenomics are just normal economic policy in the global standard. It was easily predicted that they would cause the employment to increase and bankruptcy to decrease, especially after the irresponsible macroeconomic policy under the DPJ administration.


Number of Workers (ten thousand)

The number of bankruptcy had been dropping under the DPJ government, but its speed has been accelerated since Abe gained the power (see the slant).

Number of Bankruptcy

It was so childish that DPJ opposed to the increased employment and decreased bankruptcy, and there was no economic debate in the December 14 election. Although many argue that the landslide victory of LDP may be attributed to unpreparedness of the opposition parties, there is a wide gap of understanding of the macroeconomic policy between the Abe Cabinet and DPJ. DPJ must study more about the macroeconomic policy.

In the meantime, because the mass media don’t know the macroeconomic policy, neither, they don’t know why LDP defeated DPJ all the three times in the 2012 Lower House, 2013 Upper House and the general election this time. One cannot easily be defeated in elections as long as they managed the economy well.

Yet, LDP was on the verge this time since it conducted the tax-hike from this year. If the Cabinet was deciding a second tax-hike from next October, LDP would have lost the nationwide local election next year. If that was the case, the Abe Cabinet would have collapsed and soon be abandoned by the Ministry of Finance.

Critiques who don’t know the economy regard the currently decreasing bankruptcy not as a result of the Abenomics but preservation of zombie companies. Because such critiques don’t understand the macroeconomic policy, they tend to look at the third arrow alone. However, it takes 5 years or so to see the influence of the third arrow visibly, so all we can do at this moment is to release as many alternatives as possible. And the percentage of which such alternatives go successful is 3 out of 100 or 1000.

It is nothing wrong to talk about importance of the third arrow, but it becomes harmful when they speak of the decreased bankruptcy as preservation of zombie companies. I call such critiques “sadistic liquidation debater”. This type of debater can often be found in the management consultants, who are harmless as long as they speak management of individual company. However, they turn to be harmful when they start talking about the macro or industrial base. They are ignorant and indifferent to the macro-economy, and always assume a full employment. That’s why they don’t understand that the deflation is causing the unemployment and bankruptcy to increase but they attribute the unemployment and bankruptcy to laziness or individual responsibility of the workers. They consider the reduced bankruptcy as preservation of zombie companies, and often regard the increased employment as spoiling of the workers.





12.12.2014

Comparison of Party Platforms (2): Economic Measures, Growth Strategy

This time, let us summarize the main parties’ policy on economic measures and growth strategy based on the parties’ official platforms.

Liberal Democratic Party

Komeito

Democratic Party of Japan

Japan Restoration Party

Party for Future Generations

Japan Communist Party


1.         Economic measures

LDP
Measures considering the inflating fuel prices and reducing rice prices
l  Specific measures to be taken promptly (support to investment in new energy, appropriate cost-transference of uprising cost, etc.)
l  Emergent measures to be taken promptly given the uprising fuel cost (support to highly fuel-reliant industries such as agriculture and transport, expansion of income insurance as safety net, etc.)
l  Continuance of reduced tax on housing loans, decreasing interest rates of loans of Housing Support Agency, creation of residential eco-points, etc.
Komeito
Emergent measures to stimulate recovery of individual consumption and investment in eye of positive economic cycle
l  Measures to deliver fruits of economic growth to family, SME and local economy and to connect corporate profits to employment and wages
l  Support to low and mid income brochures such as expansion of simple subsidy
l  Support measures to acquiring houses such as reducing housing loans
l  Reconsideration of the green tax on vehicles
l  Support to spontaneous efforts by the local governments in cold and depopulating areas such as provision of gasoline and kerosene to hospitals and social welfare facilities
l  Support to highly fuel-dependent industries such as agriculture and transport and small-sized corporations (safety net corresponding to uprising fuel cost, continuance of discounts of highway fees, introduction and expansion of surcharge, etc.)
l  Further measures toward energy conservation and renewable energy
l  Support to finance of SMEs (safety net loans and insurance, flexible implementation of loans in case of disaster, etc.)
DPJ
Countermeasures to increasing fuel cost and weakening yen
(subsidy targeted at SMEs, agriculture, etc.)
JRP
Economic measures overcoming the distributive public works projects
l  Expansion of reduced tax on economical housing
l  Measures on weakening yen (reducing the gasoline tax, etc.)
l  Provision of education voucher to low income brochures
l  Creation of exemption system of gift tax subject to marriage and child-rearing money
l  Welfare: temporary subsidy to corporations which increased employment
l  Promotion of the smart community projects such as local assumption of natural energy and co-generation
l  Life support to the needy
Future
---
Communist
Prompt measures on the rice price

2.         Growth Strategy

LDP
Further expansion of the positive economic cycle to every community by swift implementation of the Japan Revitalization Strategy
l  Corporate tax reform: reducing the corporate tax rate to 20s in several years
l  Creation of environment toward private-led economy: drilling the bedrock regulations in two years and expansion of the National Strategic Special Zones
l  Legal support to real estate industry, stimulation of investment, promotion of residential reform and used-housing industry
l  Enhancement of corporate governance
l  Construction of no.1 monetary market in Asia
l  Necessary measures to be considered and taken on growth money and safety net money
l  Comprehensive measures to stimulate industrial metabolism and acceleration of ventures
l  R&D enhancement, human resource, matching of industry-university-government, etc.
l  Tourism, Cool Japan strategy, IR
l  Disaster-resilience
l  Formation of high-speed railway networks including shinkansen and linear car, container ports, enhancement of the Haneda and Narita airports, etc.
l  Local revitalization in which local governments play the main role (decentralization reform, correction of financial gaps, compact city, etc.)
l  Local revitalization through regulatory reform, creation of local employment and industry
l  Revitalization of agriculture emphasizing local originalities and resources
l  Comprehensive support to management of construction, transport and shipbuilding industries which carry out the local economy
l  Agriculture to be transformed to growth industry, doubling income of farmers and villages through deceasing production cost and expanding size, utilization of robots and computers, branding, etc.
Komeito
Firm implementation of the growth strategy
l  Raising the energy and environment (renewable energy, low CO2 society, etc.)
l  Raising the health care and nursery (innovative technology, ICT, development of robot nursery devices, etc.)
l  Aggressive agriculture (specific export strategy, branding through 6th industry, farmland concentration, etc.)
l  Industrial competitiveness of dairy farming, fishery and forestry
l  Action plan toward promotion of robot industry
l  Vital, warm community to be maintained through local revitalization (long-term vision on local revitalization, local employment, transference of the central government function, compact city, etc.)
l  Support to SMEs as carrier of energy/environment and heath care/nursery
l  Support to succession of SMEs (matching of companies without successor and business operators, reducing burden of gift tax and inheritance tax, etc.)
DPJ
Policy resources to be concentrated at green, life, agriculture and SMEs.
l  Disposable income to be increased through investment to people which changes anxiety to hope such as child-rearing, employment and retirement life
l  Corporate tax to be reduced after securing alternative tax resources
l  Creation of comprehensive subsidy to local governments, decentralization reform bill to be proposed to accelerate transference of function and budget of the central government, simplification of procedures
l  Promotion of innovation of regenerative medicine, bio, ICT. Marine and space development
l  Support to business startup, SME support to be integrated under a newly nominated minister
l  Local revitalization and employment to be realized through renewable energy and SME support. Basic Act on promotion of decentralized energy to be proposed.
l  Enhancement of the life industry
l  Individual compensation to farmers to be legislated, number and income of farmers to be increased through promotion of agriculture
l  Promotion of domestic woods, stabilization of fishery management
l  Formation of compact city, promotion of reform business of used-residents,
JRP
Thorough competition policy to become “earning nation”
l  Thorough implementation of competition policy in all the industries
l  Medical care and social welfare to be transformed to growth strategy (standardization of medic through utilization of big data, lifting ban of mixed diagnosis, corporate entry, etc.)
l  Agriculture to be shifted to growth industry, JA reform, farmland act to be revised (abolishment of rice production adjustment and promotion of rice export, privatization and division of JA, stimulation of entry by allowing corporate ownership of farmlands, etc.)
l  Necessary legislative measures to be taken to open the governmentally-founded infrastructure business
l  Opening of the communication industry (complete privatization of NTT, capital division between infrastructure and services, revision of the radio act, etc.)
l  Tourism and culture to be new money-making icons (Singapore-type integrated resort to be realized, selection and concentration of local airports, privatization of airport management, etc.)
Future
Regulatory reform and defeating the vested interests by doshu-divided efforts
l  Stimulation of entry into the agriculture, health/nursery care and energy by overcoming the bedrock regulations
l  Shift into least-necessary regulation/rules to sustain free and fair market while securing the national life and health
l  Construction of a capital/labor market which distributes production resources freely and fairly, creation of safety net which enables re-challenges
l  Thorough competition policy “from subsidy to vouchers”
l  Expansion of free trade zones
l  Capital regulation including a targeting-zone system on main currencies
l  Agriculture to be transformed to attractive, internationally-competitive industry
Communist
Stopping runaway of the Abenomics: shifting to life first will recover the economics
l  Tax reform which demands certain burden on major companies
l  Economic reform that utilizes the internal reserves of major companies to increase the national income
l  Shifting to support measures in eye of all SMEs as the main pillar of the economy
l  Agriculture to be restored by retreating from the TPP negotiations (drastic enhancement of price and income compensation by recognizing the agriculture as the primary industry)

(charts drafted by PPPC)

12.07.2014

Comparison of Party Platforms (1): Policy on Consumption Tax and Finance

The Lower House general election was officially announced on December 2 and the political parties entered the ballot race. The ruling and opposition parties will struggle over 475 seats (295 small districts, 180 proportional representation in 11 blocs) for 12 days until December 14.

The main policy issues for the election include the continuance of the Abenomics, national security legislation including exercising the right to collective self-defense, resuming operation of the nuclear power plants, etc.

This week, let us summarize the parties’ policy on the consumption tax and financial reconstruction which Prime Minister Abe recognizes as the top-priority issue in the campaign.


Liberal Democratic Party

Komeito

Democratic Party of Japan

Japan Restoration Party

Party for Future Generations

Japan Communist Party


1.         Consumption Tax

LDP
l  To be hiked to 10% in April 2017
l  Reduced tax rate to be introduced at the time of tax-hike after considerations on the subject item, finance and revenue and acquiring consents of relevant actors and the public
l  All the revenue from the consumption tax to be spent for social security
Komeito
l  Reduced tax rate to be introduced at the time of tax-hike to 10% in April 2017
l  Subject item, finance and revenue of reduced tax rate to be considered
DPJ
l  Consumption tax-hike to 10% to be extended (reasons include the worsened economy due to the Abenonomics, non-execution of social security stabilization and Diet-members cutback)
l  Consideration on tax-exemption combined with subsidy as measures for low-income brochures
l  Revenue from consumption tax to be limited to social security
JRP
l  Consumption tax-hike to 10% to be suspended
l  Opposition to deletion of the “economy provision” that leaves room for extension of the tax-hike
l  Consumption tax to be shifted to local tax. Setting of the rate to be delegated to the local governments as primary tax revenue
l  Tax-exemption combined with subsidy to be realized on assumption of the “my number” system (because of the low cost-benefit performance of reduced tax rate and all-out subsidy)
Future
l  Consumption tax-hike to 10% to be extended
l  Securing fairness of the consumption tax by invoice system
l  Following conditions to be met as premise for tax-hike
       More transparency of finance through financial and accounting reforms
       Social security reform such as rationalization
       Economic and social reform to realize sustainable economic growth
l  Consumption tax to be shifted to local tax
Communist
Consumption tax-hike to 10% to be suspended, ways not to depend on the consumption tax to be groped

2.         Financial Reconstruction
LDP
l  Simultaneous realization of economic growth and financial reconstruction
l  Primary balance to be shifted to surplus by 2020, and financial deficit to GDP will be accordingly decreased steadily
l  Specific plans to be decided by the next summer
l  Administrative and financial reform will be continued
Komeito
l  Primary balance to be shifted to surplus by 2020
l  “mid-term plan” will be drafted for realization of the goal
DPJ
l  Act on promotion of the financial healthiness to be submitted, primary balance to be shifted to surplus by 2020
l  Promotion of “appropriation reform”, “growth strategy” and “revenue reform”
l  Relooking on the distributive public works, and steadily implementing the infrastructure works for reconstruction or which are truly needed
JRP
l  Act on Financial Responsibility to be submitted
l  Schedule toward the “primary balance zero” premised on “appropriation reform”, “growth strategy” and “revenue reform” to be drafted
l  Revenue to be created through “self-cutting reforms” and “administrative reforms”
30% cut on the Diet expenses, Diet seats, cost cuts on the central government personnel fees, downsizing of the independent administrative agencies and public-private funds, disposition of government assets, integration of tax-collection agencies into Revenue Agency, etc.
Future
l  Act on Financial Responsibility toward realization of public accounting reforms
l  Mid- and long-term financial plans to be drafted toward strategic financial management
l  Large cutback on the transferred appropriateness which are causing wastes and distributive budgets and relooking on the tax
Communist
l  Tax reform penetrating the principle of capability by revising the tax-exemption to the wealthy brochures and major companies
l  Appropriation on public works projects or military expenses to be reduced
l  Tax-increase to be sought through economic reforms that increases the national income by utilizing the financial reserves of the major companies


(charts drafted by PPPC)