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October 30, 1998 Keidanren (Japan Federation of Economic Organizations) |
Japan's economy is in a severe state of crisis. In order to revitalize its economy, the Japan's government now has to stabilize the country's financial system, reform the tax system and promote public investment at the earliest possible date.
In order to fill the domestic deflationary gap, which seems to amount to some 20 to 30 trillion yen, it is necessary to provide additional financing of more than 10 trillion yen. The government should present a framework カジノ シークレット 勝て ないhis extra financing in November and summon an extraordinary session of the Diet by the end of this year in order to draw up a supplementary budget. The Japan's government should materialize urgent economic recovery measures based on guidelines mentioned below. Especially, the government should promote public investments that will serve as a bridge to the 21st century by compiling the supplementary budget. The governmental efforts will ease the Japanese people who currently have a sense of insecurity in employment and income.
Public investment should be directed towards projects that provide a bridge between the present and the 21st century.
The conventional concept of public works should be discarded; the government should not confine public works included in the supplementary budget to ones that can be completed within a fiscal year. In order to revitalize Japan's economy, the supplementary budget should include public works whose completion needs time beyond this fiscal year. Also, the government should promote public works whose progress has been held in check by single-year budgetary restrictions.
Various long-term plans of building important social capital in Japan have been postponed under the name of the fiscal structure reform. The government must withdraw the postponement policy.
The basic policy for compiling the budget for fiscal 1999, which received the cabinet approval on August 12 this year, still requires the government to hold in check the progress of projects カジノ シークレット 勝て ないhe 21st century with high economic effects. The government should change this position and promote projects such as high-quality trunk roads, new bullet train lines, large-scale projects for nuclear power, nuclear fusion, space development, and transfer of capital functions.
Since Japanese local governments are suffering from financial difficulties, the local authorities must conduct bold administrative reforms to reconstruct their finances. Moreover, in order to ensure the smooth running of these public works, the national government should fully finance more public works and, as a temporary measure, sharply raise the subsidies given to cooperative projects with the local authorities.
Considering the current economic situation in Japan, public investment must induce private investment effectively. The government should intensively promote projects that can produce an immediate economic effect. The primary areas of the investments are urban development, distribution, information, welfare, the environment, science and technology, energy, and new business. Deregulation and the use of so-called Private Finance Initiative(PFI) are also essential in creating the sorts of environment that facilitates the promotion of private enterprise.
The government should endorse budgetary carry-over to the next fiscal year to ensure continuous budgetary execution for public works.
At the same time, it must be clarified and be disclosed to the public how the supplementary budget is used and what contribution it is making to the structural reform of the Japanese economy.
The following is a list of projects in which major investment efforts should be made. The government must give concrete shape to these projects and promote them as soon as possible, while it proceeds with deregulations in order to create environments that will help the private sector to set up new enterprises with greater ease.
Improvement of traffic infrastructure for smoother links within and between regions
Promoting the development of comfortable towns
Strengthening cities against disaster
Removal of bottlenecks for smoother circulation
Improvement of infrastructure at nodes joining land, sea and air transportation modes
Improvement of infrastructure to promote computerization and standardization of distribution activities
Priority preparation of centers for international goods distribution and human circulation
Computerization of the government administration
Computerization of the educational system
Computerization of medical and welfare services
Support in countermeasures カジノ シークレット 勝て ないhe "Y2K problem"
Along with implementation of public investment, the taxation reform is another priority for Japan. A reduction in effective corporate tax rates to 40% ahead of schedule, and early implementation of additional reductions in income and residential taxes are particularly important to expand domestic demand.
With these taxation reforms, which have immediate economic effects, public investment can have major impact on the Japanese economy. We are witnessing consumer behavior such as a postponement of home purchases in anticipation of relevant tax cuts, which have become a subject of political discussions. Therefore, any delay of taxation reforms might adversely affect Japan's economic recovery. The government should convene an extraordinary session of the Diet to actualize taxation reforms in the following areas so that the reform can have synergetic effects with public investments that are incorporated in the supplementary budget.
The current tax incentives for home purchases have long supported the housing demand especially for middle-income taxpayers. The government should temporarily expand the current tax incentives to give an further stimulus to the demand. The applicable period カジノ シークレット 勝て ないax deductions should be extended from the current first six years of ownership to ten years. Moreover, the tax deductions should be allowed from residential taxes, and the incentive should cover purchasing of the building site.
At the same time, in order to deter postponement of home purchases and to boost the economy, there is a need to promptly introduce, in the form of an institutional tax-system reform, the much-demanded income-tax deductions for loan interests on properties for residence.
The real estate acquisition tax should be abolished as it places an added psychological burden on prospective Japanese home purchasers. The registration license tax for real estate acquisitions should be lowered and replaced by a handling charge, and revenue stamp duties should be reduced to a single and low level.
Considering the current state of the Japanese securities market, the securities transaction tax and the bourse transaction tax should be abolished immediately. Furthermore, taxes on capital gains from stocks held for long terms should be reduced, double taxation on dividends should be eliminated, the stock option tax system should be expanded, and approval given to summing up losses from stock investments with other incomes.
The automobile acquisition tax should be exempted for a new car bought to replace an old one held for more than a certain number of years following registration.
The legal life of personal computers should be shortened from the current six years to around three years, and the ceiling for annual deductions per a personal computer should be raised from the current 100,000 yen to 300,000 yen.