This Week’s “Nagata-cho”(June 10-17)

On June 13, the revised bill on national referendum aiming at expanding the voting age from 20 to 18 years old from four years later was passed into legislation due to approval by 8 ruling and opposition parties except the Social Democratic Party and Japan Communist Party. The main opposition Democratic Party of Japan requested a supplementary provision restricting free reinterpretation of the Constitution by Cabinet at times and promoting Diet deliberation on the issue, which was finally entailed in the revised bill.

The current legislation, enacted in May 2007, has maintained that not only the voting rights for national referendum but for general elections and adultery age in the Civil Law should be older than 18 years, but political gridlock has prevented the Diet from designing detailed system of national referendum. This time, it was arranged that the Cabinet should “take necessary legislative measures within two years” by establishing a joint project team by the eight parties in the Diet.

At the same time, accordingly with passage of the bill, moves toward amending the pacifist Constitution kicked off, as well. Since this time’s passage obtained more than 2/3 votes in both Houses which also enables amendments of the Constitution, the ruling Liberal Democratic Party started seeking ways leading to practical discussions on Constitutional amendments. LDP will first grope ways to actually amend some Article which seems to be easier to obtain understanding of the opposition parties within two years or so. In particular, candidates include addition of “the right to environment” and “the right to privacy” to basic human rights. LDP schedules to hold hearings from the party members in the Diet to consider what part of the Constitution are easier to be amended. Yet, because there are wide gaps on views and attitudes among the eight parties so it is yet to see whether they will reach an agreement. Political bargaining will likely continue for the meantime.

Besides that, there were passages of the revised Power Business Act to allow full-scale entry into power sales industry in 2016 on June 11, as well as passage of the revised local education administration act to expand mayoral and gubernatorial authority on education on June 13.

*The state of deliberations in both Houses and committees are available from the following websites.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

The Diet members entered discussions on the revised Diet Act bill to establish a committee for information protection and oversight based on the Special Intelligence Protection Act enacted late-last year which gives suggestions to the Cabinet and entails punishment to Diet members who leaked information on June 10. On the same day, DPJ, Japan Restoration Party and Yuinotoh jointly submitted a counterproposal bill to the Diet and both legislations were entered into discussions simultaneously on June 10 in the Lower House Rules and Administration Committee and there were voting on June 12 which resulted to passage of the Cabinet’s bill and denial of the opposition camp’s bill. The ruling camp’s bill was immediately sent to the Upper House. For the tight schedule toward end of the ordinary Diet on June 22, the ruling parties and Cabinet will haste on passing the bill on around June 20 through the Upper House. On the other hand, Japan Communist Party and Social Democratic Party submitted a bill to invalidate the Special Intelligence Protection Act in the Upper House. The two parties will call for cooperation to DPJ and other oppositions.

On Lower House election system reforms including reduction of the seats, the Lower House Rules and Administration Committee agreed on an idea to delegate selection of members of a third-party panel to discuss new election system to the Lower House President Ibuki. In a meeting on June 13, it was arranged that an outline of the panel such as number of members and items to be discussed in the Committee’s next meeting on June 20. President Ibuki will then advance selection of members taking into consideration the opinions of the various parties.

Intra-coalition discussions on reinterpretation of Japan’s Constitution to exercise its right to collective self-defense have continued and LDP and its junior coalition partner New Komeito have remained as far apart in a meeting held on June 10. LDP Vice President Komura had asked government officials to prepare a draft of the constitutional reinterpretation and the Cabinet eyes approving the draft on June 20. On the other hand, Komeito officials involved in discussions with the LDP have so far expressed opposition to the Abe administration’s plans to change the interpretation of the pacifist Constitution to lift Japan’s self-imposed ban on exercising the right to collective self-defense.

However, Prime Minister Shinzo Abe has instructed LDP officials to wrap up talks with Komeito so that his Cabinet can approve a change in the constitutional interpretation before the current Diet session ends on June 22.

Under pressure from its coalition partner, Komeito is considering giving its consent for Japan to exercise its right to collective self-defense but only in limited situations.

During talks with Komeito on June 13, Komura presented three conditions for Japan’s use of military force in exercising the right to collective self-defense.

The three conditions, which all had to be met before Japan could exercise the right to individual self-defense, were: a tense and inappropriate invasion of Japan; the absence of other means to eliminate that threat; and the use of the minimum required level of military force. New Komeito officials will take the proposed conditions back to their party for further discussions, as the proposal opens the door for the exercise of the right to collective self-defense. Sharp discussions and bargaining between the coalition partners will likely continue until closing of the ordinary Diet on June 22 .

Toward practical end of the Diet on June 20, the ruling parties schedule to advance the remaining legislations steadily. Meanwhile, there are sharp consultations on controversial issues such as the Constitutional reinterpretation with regard to the collective self-defense and drafting of the new growth strategy to be released within this month. A close look at the delicate political situation is now required.

This Week’s “Nagata-cho” (June 3-10)

Prime Minister Shinzo Abe on June 5 pledged to reduce Japan’s corporate tax rate in fiscal 2015 at the G-7 summit meeting held in Brussels. Also, Abe showed decisiveness to tackle with such issues as regulatory reforms in the power, medical care and agriculture, new growth strategy including new working hours and foreign workers, and public sector reforms such as GPIF that operates pension funds.

Prior to that on June 3, the ruling Liberal Democratic Party finalized its suggestion on the corporate tax　reform in the party’s Tax Commission. While it accepts the in-effect corporate tax reduction, it recommended expansion of the taxation targets to deficit-making companies and creation of some permanent alternative financial source covering the loss to be caused by the tax-reduction. Although LDP Tax Commission and the Ministry of Finance had opposed the corporate tax reduction, it now seems that LDP made conditional concession due to Prime Minister Abe’s strong decisiveness.

Now the ruling coalition and Cabinet are on the track of practical corporate tax reduction. It will be entailed in the Basic Guideline for Economic and Fiscal Policy to be released in the end-June after consultations within the ruling camp and Cabinet. Final detailed arrangements will be arranged in the end-year tax reform discussions.

While the economic recovery minister Amari announced a numerical target of “20s % in about 5 years,” it is yet clear to what extent and period of time the tax-reduction will be. Also, ministers have different views on alternative financial sources and there have been no sign of coordination so far. It will likely be a focus of bargaining within the ruling coalition and Cabinet.

*The state of deliberations in both Houses and committees are available from the following websites.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

Seven political parties agreed and passed the national referendum bill that lowers the voting age from 20 to 18 years old in the Upper House on June 11. Accordingly with passage of the bill, the submitter seven parties will hold a first meeting of joint project team by the end of this ordinary Diet session.

On a Diet monitoring body over the information protection to be established based on the Special Intelligence Protection Law enacted late last year, the ruling parties and opposition Democratic Party of Japan held a consultation meeting on June 4. LDP and New Komeito suggested a Committee for Information Oversight (tentative) in both Houses that judges appropriateness of information protection and an idea of revising the Diet Act to entail punishments to Diet members who leaked information. On the other hand, DPJ will propose a counterproposal to the ruling camp’s revised Diet Act already submitted to the ordinary session. DPJ’s proposal aims to make it compulsory for the Cabinet to disclosure information when the President of either House request the government with some exceptional cases.

On the Upper House electoral system reform to correct disparity in the weight of one vote, LDP’s Secretary-General in the Upper House Waki drafted a proposal to integrate less-populated 20 constituencies into 10 as well as 10 into 5, along with the already-drafted party line to integrate 22 constituencies into 11. These three proposals will be lined up and be discussed simultaneously in the next meeting to be held on July 26. While each denomination in the Upper House is expected to discuss the proposals, there are strong oppositions even in LDP so there is a possibility that any of the proposals won’t be accepted. LDP will establish a project team soon to carefully discuss its proposal, taking 1-2 month.

On a constitutional reinterpretation concerning collective self-defense, LDP requested to increase the frequency of meeting with the coalition partner Komeito in order to accelerate discussions. Komeito accepted the offer so the meeting will be held twice a week. Out of the 15 scenario of so-called “gray-zone” cases, Komeito leaned to accept two cases. The government further proposed ideas to simplify procedures of Cabinet approval for scrambling (via telephone) and others, but pacifist-leaning Komeito reserved responses as LDP did not deny relooking standard for arms usage by revising the SDF Act. In a meeting on June 6, the parties finally agreed to maintain the legal framework and to respond by changing implementation of the law, due to the concession made by LDP. New legal framework will be considered sometime in the future, they agreed.

At the same time, 4 scenarios in relation to international cooperation activities were discussed in the meeting. 3 gray-zone scenarios and 4 international cooperation scenarios are now displayed on the negotiation table, and the coalition talks started discussions on eight specific scenarios in which Japan can exercise its right to collective self-defense, including protecting U.S. ships and removing naval mines in the Persian Gulf this week. In eye of revising the Japan-U.S. defense cooperation (“Guideline”) in the year-end, Abe instructed to prepare for Cabinet approval before the end of the current Diet session. On the same day during talks between the coalition partners, LDP Vice President Komura asked government officials to prepare a draft of the constitutional reinterpretation for eventual Cabinet approval.

In a bid to gain the support of reluctant Komeito, the Abe administration is preparing "guidelines" to limit the activities of the Self-Defense Forces when exercising the right to collective self-defense: A key element of the guidelines will be a restriction on dispatching SDF members overseas and Diet involvement. The coalition talks have faced a climax this week.

There was a party leaders’ debate this week on June 11, whose tone remained relatively calm. It might trigger other moves toward realignment of the opposition parties. Remaining less than two weeks to the end of the Diet session, let’s see impacts of the leaders’ debate carefully.

This Week’s “Nagata-cho”(8-15.Apr, 2014)

 On April 8, the ruling Liberal Democratic Party’s General Council
approved a revised plan on the country’s new basic policy on energy
proposed by the government. In the new basic energy plan, it regards
the nuclear power as the country’s “important base-load resource,”
while at the same time announced to increase rate of renewable energy
to the extent “exceeding the past government goals.” The basic plan
also entailed words of reflection on the accident at Fukushima no.1
nuclear power plant and vows to decrease the country’s dependency on
the nuclear power, while it announces to resume operation of nuclear
power plants which passed the Nuclear Regulation Authority’s safety investigation.
 Given approval of the ruling coalition of LDP and New Komeito, the
Cabinet approved the basic plan on energy on April 11. The government
held a first meeting of relevant ministers on renewable energy
(chaired by Chief Cabinet Secretary Suga) based on the basic plan, and
affirmed to advance introduction of renewable energy with all the
ministries involved. The meeting will continue to be held to discuss
future energy composition or numerical targets of renewable energy.


 On a bill to revise the local educational administration act to
advance reforms of the Board of Education in local governments, the
Lower House plenary session took up the bill on April 15 and entered
discussions. The ruling parties seek an early passage of the bill within April.
 On the other hand, Democratic Party of Japan and Japan Restoration
Party on April 14 jointly submitted a counterproposal bill that plans
to abolish the Board and entitle the educational authority to
mayor/governor uniformly. The counterproposal suggests establishment
of a third party monitoring body on educational administration, as
well as an idea of school boards through which guardians and parents
can participate in management of public elementary and junior-high schools.
 Discussions and consultative negotiations on the bills will likely be
active from this week.

*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/

 On April 8, LDP, Komeito, DPJ, JRP, Your Party, Yuinotoh and
People’s Life Party jointly submitted a national referendum bill
setting procedures to amend the Constitution. The Lower House
Commission on the Constitution entered discussions on the bill on
April 10, and interpellation sessions are scheduled on April 17 and 22.
In the Upper House, New Renaissance Party, not having a seat in the
Lower House, has announced to act in concert with the seven parties so
the bill will likely be passed into legislation in the current Diet session.
 The eight parties, in eye of expanding the voting rights to age of 18
from 20 in two years, schedule to establish a project team. Yet, there
are passive voices toward expanding the voting rights within LDP so it
is yet clear how the parties will reach an agreement. The bill also
entails controversial issues like expression of opinions by individual
government employees and their organizational campaigns. Furthermore,
as the joint-struggle by the eight parties exceeds 2/3 seats in both
Houses which fulfills requirements to submit amendments to the
Constitution, the political focus will likely shift to a way of
Constitutional amendments itself. In light of this, Natsuo Yamaguchi,
representative of Komeito, started asserting that the right to
environment should be manifested in the Constitution. But DPJ is
rather passive on such discussions.


 On a new Diet monitoring body that oversees classification of special
intelligence by the government, LDP finalized its draft bill
officially on April 9. In a meeting of the ruling parties on April 11,
LDP agreed to establish a project team to discuss the new body to
finalize the bill with its coalition partner Komeito.which has had
different ideas with LDP. After coordination with Komeito, LDP plans
consultations with JRP and Your Party which have agreed with an idea
to establish a new Diet body. In order to establish a new body by
December when the special intelligence protection law will be taken
into effect, LDP seeks an early passage of the bill within this Diet.

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This Week’s “Nagata-cho”(1-8.Apr, 2014)

 The Cabinet on April 4 approved and submitted a bill to revise the
local educational administration act to advance reforms of the Board
of Education in local governments.
 The bill entails plans to (1) establish a new post of “education
chief” which undertakes functions of existing Chairman of Board and
secretary-general concurrently and appointed by local leaders with
consents of assembly for three year’s term, (2) that final
responsibility of educational administration (as executor) will
continue to reside in the Board, and (3) to make it compulsory for
local governments to establish a full-time comprehensive panel that
discusses and makes important decisions with regard to education such
as budget, ordinances and basic guidelines chaired by mayor/governor
and composed of intellectuals. It also arranged that selection of
textbooks and personnel matters of teachers be exclusively handled by
the Board in a bid to prevent excessive intervention by political leaders.

 The ruling coalition of Liberal Democratic Party and New Komeito seek
an early passage of the bill, eager in holding consultative
negotiations with the opposition parties. Still, the opposition
Democratic Party of Japan and Japan Restoration Party had agreed on
April 1 to submit a joint counterproposal to the same Diet that plans
to abolish the Board and entitle the educational authority to
mayor/governor uniformly. The counterproposal also suggests
establishment of a third party monitoring body on educational
administration. For the wide gap on the view of reforms, it isn’t
clear yet whether the confronting sides can reach an agreement during
the current ordinary session of the Diet.

*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/

 On Japan’s new basic plan on energy policy that sets the country’s
mid- and long-term directions,
 A working team of the ruling coalition approved a draft plan on April
3. The draft has inherited recognition of nuclear power as the country’
s “important base-load resource,” suggesting that the Cabinet will
seek resuming operation of the country’s nuclear power plants. With
regard to renewable energy, the ruling coalition agreed to avoid
mentioning specific numerical targets but to entail expressions to
“exceed goals of the past government decisions” to show an attitude
to accelerate introduction of renewable energy in a bid to decrease
dependency on the nuclear power. The Cabinet eyes increasing the rate
of renewable energy to 30% by 2030 as goal of efforts, and ministerial
meeting to be established after a Cabinet approval on the plan will
continue further discussions on the energy policy, including numerical
targets of renewable energy and future power composition.

 As the inter-coalition discussions have roughly been settled on the
educational reform, new energy plan and the Three Principles of Arms
Export, the next focus will shift to inter-coalition coordination on
controversial issues like a Diet monitoring body on special
intelligence protection by the government or reinterpretation of the
Constitution with regard to exercising the right to collective self-defense.
 Since enactment of the special intelligence protection legislation in
last autumn, there has been discrepancy between LDP, insisting that a
new Diet monitoring body will not have an authority to judge
appropriateness of information-classification and Komeito, voicing
that a new body will be given right to release recommendations to the
government on designation/cancellation in case the body judged there
was an arbitrary classification. The gap remains as far apart.
 LDP and Komeito plans to hold a meeting of project-team sometime this
week. The ruling parties will bring in their each draft bill, but it
is yet to be seen whether the discussions will be settled.

 At the same time, there are wide discrepancy between Prime Minister
Shinzo Abe and the ruling LDP, and its coalition partner Komeito on a
change of interpretation of the pacifist Constitution toward lifting
the country’s self-imposed ban on the right to collective
self-defense. Although the Advisor Panel on Reconstruction of the
Legal Basis of Security had scheduled to submit its report within
April, the panel postponed its schedule to sometime in May after long
holidays. The government entered final stage of drafting by stating to
limit the Self-Defense Forces’ activities to Japanese territorial
waters or the high seas in the exercise of the right to collective
self-defense to gain the support of intra-party moderates and Komeito.
 On April 3, LDP started a meeting with Komeito. But Komeito called
for a cautious approach toward lifting the nation's self-imposed ban
on the right to collective self-defense, indicating that revising
existing laws such as the Law Concerning Measures for Peace and
Security of Japan in Situations in Areas Surrounding Japan are
sufficient for the nation to respond to emergencies. While the parties
will continue discussions on the issue, it is likely that the parties
will have difficulty reaching an agreement.

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This Week’s “Nagata-cho” (25.Mar-1.Apr, 2014)

 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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This Week’s “Nagata-cho”(18-25.Mar, 2014)

 Last week on March 20, 95.88 trillion yen of initial budget for next
fiscal year was approved in the Upper House by majority and thus
passed into legislation. The ruling Democratic Party of Japan, Your
Party, Japan Restoration Party and Communist Party voted against the
budget.
 The budget entails 30.51 trillion yen for social security (+4.08%
from this year), 5.96 trillion yen for public works including disaster
management like South Sea trough earthquakes (+12.9%), 4.88 trillion
yen for national security and defense including measures to China and
North Korea (+2.8%), 5.96 trillion yen for promotion of science and
technology (+1.4%). Combined with 5.46 trillion yen of the
supplementary budget enacted in February, the amount of government
spending exceeded 101 trillion yen. The government plans to implement
both the spending simultaneously so that possible negative impacts of
the consumption tax hike from April 1 on the country’s economy will
be alleviated. The government schedules to release numerical progress
of the budget soon.

*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/

 Prime Minister Shinzo Abe, having called the current ordinary session
as “Diet to achieve positive cycle”, once again showed decisiveness
to make efforts toward recovering the country’s economy as the top
priority in a press conference held right after passage of the budget.
Abe also stated he would try to minimize negative economic effects of
the consumption tax hike to 8%. With regard to growth strategy, Abe
showed strong willingness toward reforms of vested interests that have
been described as solid as bedrock, along with the National Strategic
Special Zones whose designation will be announced within this March.
Furthermore, in eye of new growth strategy scheduled in June, Abe
mentioned a corporate tax reduction, along with women’s promotion in
the society and agricultural reforms, as possible effective measures
but avoided detailed explanation; perhaps for considering different
views expressed by the finance minister Aso who has taken cautious
attitudes toward a corporate tax reduction.

 In the meantime, four other budget-related bills (revised income tax
act, local corporate tax act, revised local tax act, revised local
subsidy act) were approved in the Upper House and thus passed into
legislation, also. These entailed abolishment of special tax-increase
for reconstruction after the Great East Japan Earthquake one year
earlier than scheduled and other supportive measures to SMEs.


 On a country’s new basic plan on energy policy, although the ruling
parties roughly agreed in a working team to regard the nuclear power
as the country’s “important base-load resource”, they are yet to
reach an agreement on numerical targets of renewable energy for
multiple views within the ruling parties. While New Komeito has
insisted specifying a numerical target in eye of decreasing
dependencies on the nuclear power, Liberal Democratic Party has shown
a passive attitude. The parties gave up on reaching a conclusion in a
meeting on March 18, and while the parties will have a discussion on
whole picture of the new plan including operation of Monju, a
prototype fast-breeder reactor, it is yet known whether the
discussions will be settled in March. Sources view that discussions
and Cabinet’s approval will be delayed until sometime in April.

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This Week’s “Nagata-cho”(11-18.Mar, 2014)

 Public hearings on 95.88 trillion yen of the initial budget FY 2014
(general account, 3.5% increase from this year) were held in the Upper
House Budget Committee on March 13, in which intellectuals voiced
requests for acceleration of the “third prong” growth strategy,
efforts toward a women-friendly working environment, and other matters.
 Based on successive announcements by large companies to increase basic
wage levels after the spring labor negotiations, Prime Minister Shinzo
Abe showed an expectation that this trend will lead to increases in
basic wage levels in small- and mid-sized enterprises as well (on
March 14). Also, the industry minister Motegi said the government
plans to release survey information on salary figures (on March 13).

 So far the discussions on the budget FY 2014 have been initiated by
the ruling parties. On Mar 17, the ruling camp suggested taking voting
on the budget in the Upper House Budget Committee on Mar 20, by which
the opposition parties have been repelled for inadequate deliberations.
Nonetheless, the budget bill has already been approved in the Lower
House on Feb 28 so it will automatically be passed into legislation
after 30 days since being sent to the Upper House for the
Constitutional provision. Simultaneously, the Budget Committee entered
discussions on revised income tax act and local corporate tax act on
Mar 7 and on revised local tax act and local subsidy act on Mar 12.
These budget-related bills will likely be enacted within this month.

*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/

 On Mar 12, the Lower House Cabinet Committee approved the bill on the
civil service reform which has been carried over from the last
extraordinary session in autumn. The bill entails plans to establish a
new Cabinet Personnel Bureau in the Cabinet Secretariat which will
control personnel of around 600 high-class officials in all the
central government ministries and that the Chief Cabinet Secretary and
ministers will jointly decide nominations of the bureaucrats. A
counterproposal jointly submitted by Your Party and Japan Restoration
Party, simultaneously discussed with the Cabinet’s bill, was rejected.
 The Cabinet’s bill was approved in the Lower House plenary session
on Mar 14 and sent to the Upper House on the same day. Since the Upper
House will take priority on the budget, a passage of the civil service
reform will likely be sometime in April. The government plans to
establish a new Bureau to be composed of 161 staffs in May to prepare
for the next seasonal personnel-reshuffle in summer. Its chief staff
will be selected from one of the Deputy Chief Cabinet Secretaries.


 On Mar 12, LDP and Komeito have finally agreed on reforms on the
Board of Education in the local governments. The draft bill plans to
(1) establish a new “education chief” (3-year’s term) to be
appointed by mayors/governors with consents of local assemblies, (2)
that the final responsibility on education (executor) will
continuously reside in the Board, and (3) to establish a comprehensive
panel on education as full-time body which will discuss and draft
basic guidelines on education including budget and ordinances chaired
by mayors/governors.
 Also, in eye of preventing excessive intervention by political
leaders, selection of textbooks and personnel of teachers were
arranged as matters exclusively handled by the Board of Education. On
matters related with bullying, the revised local education
administration act will entail provisions that enable the education
minister to release orders to each educational board.
 Given the agreement reached by the ruling parties, the Cabinet
schedules to finalize and submit the bill to the ordinary Diet in
early-April. Toward an early passage of the bill, LDP and Komeito have
shown flexible attitude to accept consultative discussions with the
opposition parties. Yet, as Your Party and JRP have stressed views to
abolish the Board and to integrate educational authorities under
mayors/governors, the gap of views has remained as far apart so there
are uncertainties whether it will lead to coordination or confrontation.

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This Week’s “Nagata-cho” (4-11.Mar, 2014)

 Last week on March 3, the lawmakers in the Diet’s Upper House
entered discussions on 95.88 trillion yen of the initial budget FY
2014 (3.5% increase from this year). As Prime Minister Shinzo Abe
schedules to attend the third meeting of Nuclear Security Summit in
Hague on March 24-25, the Cabinet and ruling parties are willing to
pass the budget into legislation on around March 20. Simultaneously,
budget-related legislations such as revised income tax act and local
corporate tax act will be taken as discussion issues in the Upper
House soon.

*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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 On reforms of Board of Education in the local governments which the
ruling Liberal Democratic Party and New Komeito have progressed
discussions, the parties’ working team on March 5 decided to impose
obligations on each local governments to establish Comprehensive
Education Panel chaired by mayors/governors and let the panel sketch
educational guidelines through legislative measures on the local
education administration act. Due to various concerns shown by Komeito,
the revised plan entails softened expressions with regard to
authorities of local leaders and educational panels. Komeito have
finally agreed and accepted the legislation plan on the Board of Education.
 The term of newly-establishing post “education chief” will likely
be arranged as three years, as proposed in a meeting on March 7, as
the result of concession between LDP’s two years and Komeito’s four
years. On personnel authority over the new official, Komeito in turn
will likely accept LDP’s idea to give the local leaders to
nominate/dismiss the newly-establishing education chief. The ruling
coalition attempts to acquire the Cabinet’s approval on that bill
around March 14, so they schedule to finalize the draft bill on March 11.
 Meanwhile, although the opposition Democratic Party of Japan and
Japan Restoration Party had planned joint submission of a
counterproposal that abolishes the Board of Education and gives
overall administrative functions to local leaders, they have failed so
far to reach a final agreement on a monitoring body on the
mayors/governors. As the joint struggle may face a break-down, JRP
will seemingly call for consultative negotiations with Your Party or
Yuinotoh, rather than with DPJ which has confrontational attitude to
the Abe Cabinet.


 On March 5, LDP and Komeito entered discussions on a new basic plan
on energy which decides the country’s mid- and long-term energy policy.
 The parties established a working team on Mar 7. The draft plan
announced explicitly to recognize nuclear power as “important
base-load” and to seek resuming operation of the country’s nuclear
power reactors as soon as their safety are confirmed. Also, it
announces to accelerate utilization of various, domestic renewable
energy as much as possible by 2015.
 Yet, the draft has avoided mentioning numerical targets, causing
criticisms from the ruling parties that it should entail numerical
targets such as on nuclear-dependency or introduction of renewable
energy. Also, there are intraparty views that establishment of new
nuclear power plants must be refrained. Komeito, having bowed
expansion of renewable energy to 30% of all the power generation and
nuke-free policy in the future, have voiced such opinions.
 The ruling parties will seek reaching a conclusion and obtaining
Cabinet’s approval within March after discussions on such issues as
whether or not to entail numerical targets and how to handle Monju, a
prototype fast-breeder reactor.

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This Week’s “Nagata-cho” (25.Feb-4.Mar, 2014)

 On February 28, 95.88 trillion yen (general account, 3.5% increase
from this fiscal year) of the initial budget FY 2014 was approved in
the Diet’s Lower House by majority vote of the ruling parties and
sent to the Upper House on the same day. At the same time, four bills
related with taxation (revision to income tax act, local tax act,
local corporate tax, local subsidy act) were also approved in the
Lower House and sent to the Upper House.

*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/

 Although seven opposition parties, led by Democratic Party of Japan,
had repelled on the voting schedule for inadequate time of discussions
on the budget bill, the ruling Liberal Democratic Party’s Toshihiro
Nikai, Chairman of the Budget Committee in the Lower House,
unilaterally decided the voting schedule on the Feb 28 by authority.
Also, Ichiro Aizawa, Chairman of the Lower House Rules and
Administration Committee from LDP, decided to hold a meeting of the
Lower House plenary session on the same day.
 The opposition parties had struggled to submit a joint
counterproposal to the government’s budget, but they could not reach
a final agreement for discrepant ideas on the budget. For that reason,
Japan Restoration Party and Yuinotoh jointly proposed a
counterproposal decreasing new issuance of government bonds and Your
Party, People’s Life Party and Japan Communist Party submitted their
own counterproposals respectively. Although the counterproposals were
taken into discussion with the Cabinet’s budget bill, they were all
rejected in the Budget Committee. DPJ, boycotting the meeting of the
Budget Committee, took a confrontational tactic in the Lower House
plenary session by submitting a counterproposal, but it was rejected
by majority of the ruling coalition.

 Due to the passage of the budget bill in the Lower House on Feb 28,
it became certain that the budget will automatically be passed into
legislation after 30 days even if the Upper House rejects the budget
for the Constitutional provision 60-2. The Cabinet and ruling parties
seek passage of the budget by March 20 in eye of Prime Minister Shinzo
Abe’s attendance on the 3rd meeting of Nuclear Security Summit to be
held on March 24-25 in Hague, Netherland. On March 3, the lawmakers in
the Upper House entered discussions on the budget in the House’s
Budget Committee. Prime Minister Abe stressed importance of an early
passage of the bill and called for cooperation of the opposition
parties.

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This Week’s “Nagata-cho” (18-25.Feb, 2014)

 Last week on February 18, the ruling coalition parties, in eye of
passing the initial budget FY 2014 within this fiscal year,
unilaterally decided to hold a central hearing on the budget on
February 25 in the Lower House Budget Committee despite persistent
oppositions from the opposition camp.
 Beforehand, local hearings had been held in Kofu and Kagoshima on
February 21, where local leaders voiced requests for countermeasures
for natural disasters like heavy-snow or construction of roads.

*The state of deliberations in both Houses and committees are
 available from the following websites.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 Meanwhile, the ruling parties also suggested schedules for voting on
the budget legislation in the Budget Committee and plenary session of
the Lower House on February 28 to the opposition parties. If the
ruling camp is able to pass the budget through the Lower House and
send it to the Upper House by February 28, the budget will
automatically be passed into legislation after 30 days even if the
Upper House decides otherwise for the Constitutional clause #60-2
providing priority of the Lower House. The opposition parties rejected
the schedule and in return requested to hold intensive discussions for
four days with Prime Minister Shinzo Abe’s attendance. The ruling
Liberal Democratic Party has taken a negative stance on the schedule
proposed.

 Opposition parties, led by Democratic Party of Japan, had planned to
submit a counterproposal jointly in the beginning, but Your Party and
Japan Restoration Party started moves to submit their own original
counterproposal bills. So DPJ held a meeting on February 21 and
suggested a joint struggle with People’s Life Party and Yuinotoh,
then each party reserved final responses.


 On reforms on Board of Education in local governments which the
ruling LDP and New Komeito have had different ideas, a subcommittee of
LDP finalized its draft bill on Feb 18 and passed the intraparty
proceeding on Feb 19. The bill entails plans to establish a full-time
appointed position and gives personnel authority over board members to
mayors/governors and other ideas. Although it was approved by the
party officially, there remain internal concerns that the reform may
infringe political neutrality of education and that the board members’
two years terms are too short. Such details will be elaborated in
discussions with the minor coalition partner New Komeito.

 The interparty discussions between LDP and Komeito started on Feb 20.
As Komeito, stressing political neutrality of education, roughly
accepted the reform plan in principle, the focus of discussions will
likely be legal framework of “council on comprehensive education
measures (tentative)”, name of the new position and its terms,
conditions for dismissing board members, etc. Komeito’s concerns
include (1) excessive mayoral/gubernatorial authority through the new
panel, (2) personnel authority of mayors/governors must be carefully
implemented, and (3) establishment of the new panel should not be
compulsory but be decided by municipalities as it may impose burdens
on municipalities.

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This Week’s “Nagata-cho” (11-18.Feb, 2014)

 On February 12-13, there were basic discussions on the initial budget
FY 2014 in the Lower House Budget Committee with all the ministers
including Prime Minister attended. Also on February 17, there was an
intensive deliberation on the social security, tax, education, etc.
The opposition Democratic Party of Japan, taking confrontational
tactics toward Abe administration, repeatedly gave questions
concerning interpretation of the Constitution with regard to
collective self-defense, Prime Minister Abe’s visit to Yasukuni
Shrine, diplomatic policy including relations with China and South
Korea, and other matters. On the other hand, while Prime Minister Abe
answered questions of Your Party and Japan Restoration Party, making
concessions as announcing themselves as “responsible oppositions,”
in a sound manner, Abe showed a sarcastic or challenging attitude
against DPJ.

*The state of deliberations in both Houses and committees are
 available from the following websites.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 In a Committee meeting on February 17, with regard to regulatory
reforms that is one of the main pillars of growth strategy, announced
a strong decisiveness to break through the country’s vested interests
within coming two years as concentrative period.
 On Abe’s longstanding policy of corporate tax reduction, the
government’s panel on tax reform started discussions on February 13.
The Cabinet plans to entail policy of corporate tax reduction in the
Basic Guideline of Economic and Fiscal Policy to be compiled in June
this year. In that end, the government will likely launch a working
group to discuss corporate discussions and its financial backgrounds
in early-March.

 On the other hand, the seven opposition parties, including DPJ and
JRP, held a meeting on February 13 to discuss policies, where they
agreed to seek a joint proposition of counterproposal to the budget FY
2014.Also, they agreed to hold discussions on common policies in the
fields of “energy policy,” “administrative reform,” and “disaster management.”

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This Week’s “Nagata-cho” (4-11.Feb, 2014)

 Last week on February 6, 5.46 trillion yen of the supplementary
budget for this fiscal year was approved in the Upper House with
support of the ruling parties and New Renaissance Party. The other
opposition parties voted against the budget for inadequate measures on
possible negative impacts of the consumption tax hike scheduled in
April especially toward mid- and small-sized enterprises (SMEs)
entailed in the budget. At the same time, the Upper House also passed
into legislation other bills related with the budget with regard to
local government subsidies and Japan Science and Technology Agency.

*The state of deliberations in both Houses and committees are
 available from the following websites.can be seen.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 The supplementary budget, giving financial backgrounds to economic
measures to alleviate negative economic impacts of the consumption
tax-hike from April 2014, entailed (1) measures to enhance
competitiveness of infrastructure development and support for SMEs in
eye of the 2020 Tokyo Olympic Games (1.39 trillion yen), (2) safety
measures and disaster management such as disaster-resilient school
building (1.19 trillion yen), (3) transfer to the special account for
reconstruction after Great East Japan Earthquake (1.93 trillion yen),
and measures toward low-income or child-rearing brochures (0.64
trillion yen), etc.
 Sources said that Prime Minister Abe directed all the ministers to
implement the supplementary budget steadily and swiftly in a Cabinet
meeting on February 7.

 According to passage of the supplementary budget, the lawmakers
entered discussions on the initial budget FY 2014 in the Lower House
Budget Committee on February 10. Interpellation sessions will be held
on February 12-13. The government and ruling parties will make efforts
to pass the budget through the Lower House by February 28, a date by
which the budget will be smoothly preceded within the fiscal year,
because the budget will be automatically passed into legislation in
the Upper House 30 days after being sent to the House for
Constitutional provisions. Yet, as deliberation and voting on the
supplementary budget spent a little time, the remaining time for the
initial budget is shorter than every year and schedule is already
rather tight.
 On the other hand, the opposition parties seek to prevent passage of
the budget within the fiscal year by extending the schedule, having an
eye on a joint struggle. Still, the ruling camp dominates majority in
both Houses of the Diet anyways so it is not likely that intension of
the oppositions will be met successfully.

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This Week’s “Nagata-cho” (28.Jan-4.Feb, 2014)

 Last week on January 28-30, there were interpellations in both Houses

of the Diet with regard to four government speeches including Prime

Minister Shinzo Abe’s general policy speech.

*The state of deliberations in both Houses and committees are

 available from the following websites.can be seen.

 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 During the session, Banri Kaieda, representative of opposition

Democratic Party of Japan, took a confrontational attitude by throwing

doubts on the risks caused by policies initiated by the Cabinet such

as (1) widening income gaps caused by Abenomics, (2) deteriorating

relations with China and South Korea, and (3) conservative-colored

legislation such as special intelligence protection bill.

 Kaieda criticized negative impacts of Abe’s economic policies dubbed

“Abenomics” and requested to tackle with issues such as raising

wages overcoming increased prices and correcting income gaps. Prime

Minister Abe, given the comments, stressed the positive

accomplishments of Abenomics and gave critical comments on the

economic policies introduced under the DPJ administration in the past.

 Kaieda also criticized Abe’s diplomatic attitude that worsened the

relations with China and South Korea due to Abe’s visit to Yasukuni

Shrine late last year and that hasn’t realized a summit meeting. In

response Abe stressed significance of the concept of “proactive

contribution to peace” and showed again his decisiveness toward

lifting Japan’s self-imposing ban on exercising the right to

collective self-defense by reviewing interpretation of the pacifist

Constitution. Kaieda also opposed to the special intelligence

protection legislation pushed through the last extraordinary session

and stressed significance of two bills submitted by DPJ to amend the

information disclosure act.

 On monetary policy, Abe stated his expectation that the Bank of Japan

would firmly continue the relaxing policy to achieve the 2% price

target, as well as that he does not exclude an idea to revise the BOJ

Act to expand government’s interventions with BOJ’s monetary policy.

On the consumption tax that is to be hiked in April, Abe explained

that measures have been taken to prevent corporations from shifting

the burdens onto small- and medium-sized enterprises.

 While Abe maintained a high-handed manner against the confrontational

DPJ, his remarks have been softer with regard to Your Party or Japan

Restoration Party to which the ruling parties have called for

consultative negotiations. Still, as there have emerged oppositions

against Abe’s attitude placing importance on strategic dialogue with

the opposition parties among the ruling coalition, Abe avoided further

comments on dialogue with the oppositions. In particular, the ruling

Liberal Democratic Party hasn’t obtained consents of its coalition

partner New Komeito on issues of Board of Education, interpretation of

Constitution over the right to exercise collective self-defense, and

relooking of the Three Discipline on Arm Exports, etc. For this reason

LDP and Komeito held a meeting of Director-General and Chairman of

Diet Affairs Committee on January 29 and reaffirmed the conventional

policy to reach an agreement among the Cabinet and ruling parties and

then to obtain consents of the opposition camp.

 On January 30, the lawmakers entered discussions on the 5.46 trillion

yen of supplementary budget that gives financial backgrounds to the

economic stimulus package. Discussions took place in the Lower House

Budget Committee on January 31 and February 3. During the discussion,

Prime Minister Abe expressed his idea to conduct a corporate tax

reduction. Nevertheless, Taro Aso, Deputy Prime Minister and Minister

of Finance, as well as Koumura, Vice President of LDP and Advisor to

LDP’s Council on Tax Reform, have shown cautious views on the

corporate tax reduction in an earlier stage.

 On February 4, after intensive discussions in the Lower House Budget

Committee with presence of Prime Minister and relevant ministers, the

voting on the supplementary budget was held and the budget was passed

through the Committee and plenary session of the Lower House.

Accordingly, the budget was sent to the Upper House, where discussions

start on February 5 and the voting will be held on February 6.

 On the supplementary budget, DPJ, JRP, Japan Communist Party and

Social Democratic Party have announced to vote against its legislation.

Although the oppositions had sought a joint struggle against the

budget, the idea was given up in a meeting on January 30 for

inadequate time for coordination. In the meeting of secretary-generals

on February 4, eight parties confirmed to continue requesting the

ruling parties to secure time and opportunities for discussions on

bills submitted by the opposition camp. They also reaffirmed to seek a

joint struggle over the initial budget FY 2014.

This Week’s “Nagata-cho” (21-28.Jan, 2014)

 The 186th ordinary session of the Diet was convened last week on
January 24. Prime Minister Shinzo Abe on the same day gave general
policy speech in both Houses of the Diet. While Abe stressed his
economic policy dubbed “Abenomics” as the top priority task, he also
mentioned his longstanding policies of reinterpreting the Constitution
as to lift the ban on the right to exercise collective self-defense
and others.

*The state of deliberations in both Houses and committees are
 available from the following websites.can be seen.
 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 (Japanese only)：http://www.webtv.sangiin.go.jp/

 Regarding the ordinary session as “Diet to Realize a Positive Cycle,”
Prime Minister Abe stressed that he would connect corporate profits to
expansion of employment and increase in wages especially in the local
areas and small- and middle-sized enterprises (SMEs) so that everybody
in this country can feel the economic growth firsthand. As to the
concerns on negative economic effects of the consumption tax hike
scheduled in April this year, Abe emphasized that the Cabinet prepared
preventive measures in the 5.46 trillion yen of supplementary budget
submitted to the Diet on January 24 along with the initial budget for
FY 2014, and requested that the opposition parties cooperate with
passage of both the budgets during the ordinary Diet session. Taro Aso,
Deputy Prime Minister and Minister of Finance, also stated his view
that Japanese economy has firmly turned upward and that the Cabinet
will make efforts to alleviate impacts of the tax-hike.

 Abe stated that the Cabinet would further make efforts to support
companies pioneering new markets by advancing regulatory reforms and
tax reforms to expand investment or research and development. In
particular, Abe vowed that the selection of the National Strategic
Special Zone will be finalized by March and the abolishment of special
corporate tax reduction for reconstruction after the great disaster
which is one year earlier than originally scheduled. The Cabinet
officially approved the action plan in relation to the industrial
competitiveness on the same day to implement the growth strategy
within three years of the concentration period.
 Also, Abe announced promotion of women, for instance to increase the
ratio of newly recruited national public servants to 30% from 2015, as
well as establishment of a private-public infrastructure import
organization to developing countries and to support challenging R&D
projects that might change the country’s socioeconomic landscapes.

 In his speech, Abe emphasized “strategic top-diplomacy” and
“diplomacy with panoramic view on the globe” based on his diplomatic
experience of visiting 30 countries and held 150 meetings with foreign
leaders. Abe stressed significance of the concept of “proactive
contribution to peace,” and at the same time, appealed that Japan’s
door to dialogue is always open but not to concede with talks with
conditions particularly with China and South Korea with which Japan’s
relation has been tensing over the territorial or historical issues.

 With regard to national security, Abe announced to consider
reinterpretation of the pacifist Constitution based on reports to be
submitted by the Advisory Panel on Reconstruction of the Legal Basis
for Security in April. Regarding relocation of Futenma Air Station to
Henoko, based on approval by Okinawa governor on landfill application
to increase runway of the base, Abe vowed to swiftly advance the
procedures while mentioning that he would make efforts to reduce
burden on Okinawan people.
 Also on the Air Defense Identification Zone (ADIZ) issue raised by
China, Abe stressed that Japan would never accept such a unitary
coercive measure to change the status quo of the Asia Pacific region.

 On the energy issue including nuclear power, Abe stated that there is
no restarting of the nuclear reactors unless they meet the safety
standard of the Nuclear Regulatory Authority that is of the highest
strictness in the world, and to decrease Japan’s dependency on the
nuclear power as much as possible. It seems that Abe remained in a
cautious tone regarding the nuclear power issue as there awaits Diet
debates and discussions soon. Abe also stressed that the central
government will take initiatives in decommissioning the nuclear
reactors and countermeasures to the contaminated water, without
letting Tokyo Electric Power Co. handle the issues alone.

 The Diet Debate kicks off on January 28. The interpellation sessions
with party leaders will be held in the Lower House on January 28-29
and in the Upper House on January 30-31. The opposition Democratic
Party of Japan and Japan Communist Party will take confrontational
tactics especially over the special intelligence protection
legislation pushed through by the ruling camp in the extraordinary
session, as well as Abe’s visit to Yasukuni Shrine late last year, or
Abe’s view on employment, social security, nuclear issue, etc.

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This Week’s “Nagata-cho” (15-21.Jan, 2014)

 Last week on January 19, Prime Minister Shinzo Abe gave an address at

the ruling Liberal Democratic Party’s convention held in Tokyo. Abe’s 

speech spent most of the time on economic measures and stressed the

achievements of “Abenomics”, not mentioning his longstanding

policies of revising the pacifist Constitution and lifting Japan’s

self-imposing ban on the right to exercise collective self-defense.

Abe then emphasized his determination toward a strong economy.

 Since the consumption tax rate is going to be hiked to 8% from this

April, Abe would like to prevent possible negative impacts of the

tax-hike on the nascent Japanese economy. For that purpose, the 5.46

trillion yen of supplementary budget for this fiscal year to provide

financial backgrounds to the economic stimulus package will be

submitted to the ordinary Diet session convening on January 24, in

line with the 95.88 trillion yen of initial budget for FY 2014. The

Cabinet and ruling camp plan to enter discussions on the supplementary

budget in the Lower House’s Budget Committee as early as on January

31. The Cabinet’s scenario is to pass the initial FY 2014 budget by

March subsequently. Also, Abe will keep requesting the economic world

to raise wages.

 The meeting of the Industrial Competitiveness Council held on January

20 compiled basic guideline for revisions on the growth strategy

scheduled in June. Abe instructed that the Industrial Competitiveness

Council and the Council on Economic and Fiscal Policy will jointly

elaborate the policy by setting common thematic strategies in revising

the growth strategy.

 The basic guideline entails a corporate tax reduction that Abe has

insisted, as well as reforms on the agricultural cooperative

association and medical corporations. It also emphasized active

promotion of women, in particular, setting targets of female

executives and managing directors in private companies, providing

subsidies to corporations that fulfilled the targets, and eradication

of waiting lists for child-rearing nursery facilities. Furthermore,

the government will likely start considerations on expansion of

reception of foreign professional workers like nurses and extension of

their working terms, as well as revisions to tax-deduction and pension

systems, etc.

 Prime Minister Abe schedules to attend the annual meeting of the

World Economic Forum (Davos Convention) on January 21-23, and to give

an address at the opening session on 22 to explain basic ideas and

concrete plans on his growth strategy.

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This Week’s “Nagata-cho” (8-15.Jan, 2014)

 On January 14, the Cabinet officially decided to convene the ordinary

session of the Diet on January 24. Last week on January 10, Chief

Cabinet Secretary Suga had attended the Rules and Administration

Committees in both Houses and had obtained consents on the schedule.

The session will be for 150 days until June 22. The ruling parties

plan to hold the four speeches including Prime Minister Shinzo Abe’s

general policy speech on the day of convening and interpellation

session by the party leaders on January 28-30.

 On January 7, Prime Minister Abe showed his determination to continue

efforts to get out of the deflation and to achieve fiscal soundness

simultaneously in the second year of his term. In light of the

scheduled consumption tax-hike in April this year, the Cabinet Office

seems to be having a concern that it may have negative impacts on the

economy, wiping out the influences of Abe’s economic policy dubbed

“Abenomics”.

 It is scheduled that Prime Minister Abe gives a keynote speech in the

opening session of annual meeting of the World Economic Forum (Davos

Convention) to be held in Switzerland on January 21-23 for the first

time as Japanese leader. Abe will likely appeal the Abenomics and the

concept of “proactive contribution to peace” and his diplomatic

policy at the international summit to the world.

 Abe has regarded the ordinary session of the Diet to be convened on

January 24 as “Diet to achieve positive cycle of the economy,”

seeking passage of the 95.88 trillion yen of the initial budget FY2014

as well as the 5.46 trillion yen of supplementary budget for this year

to give backgrounds to the economic stimulus package to be submitted

on the same day. Also, Abe plans to revise the growth strategy by

mid-January to accelerate structural reforms in the field of

employment/labor, agriculture, medical care and nursery. Meanwhile,

the Cabinet held the first meeting of the National Strategic Special

Zone Advisory Council on January 7 and decided to finalize designation

of the zone by March.

 On the corporate tax reduction strongly requested by the economic

world, Abe has shown decisiveness to implement it from the next fiscal

year. Accordingly, the economic minister Akira Amari stated it will be

discussed in the Council on Economic and Fiscal Policy. Yet, the

finance minister and Deputy Prime Minister Taro Aso has thrown doubts

on economic impacts of the tax reduction by saying that it will have
nothing to do with 70% of the entire companies.

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