November 26(Friday)

Deliberations on Supplementary Budget Enters Final Stages: Economic Growth Policies Will Not Be Put Off!


While the Government responds to various contingencies, it must also continue to move along programs that concern the livelihood of the Japanese people. With this in mind, this report addresses public inquiries on how the deliberations on the supplementary budget affect employment measures. The report was taped before the shelling incident by North Korea.



Prime Minister: Employment will be a decisive key factor for the Japanese economy, particularly to break free from the current deflation. That's how I basically see it.


Narration: Precisely right now, the deliberations on the
supplementary budget for this fiscal year are in their final stages.
Prime Minister Kan has placed employment measures for economic
growth at the top of his policy agenda leading up to the
formulation of next fiscal year's budget. His passion for
employment measures comes from what he saw and felt on the ground.


Prime Minister: The first is the dispatched workers' village. Two years ago, in Hibiya Park, I met people there who told me they had absolutely no prospects. As I listened to them, I felt once again how disconnected people have become. I thought, we need to have a society that can somehow lend a helping hand to them. That was one of the things that ignited my passion.


Narration: From this emerged the following slogan.


Prime Minister: 1. Employment, 2. Employment, 3. Employment!


Prime Minister: Some people interpreted my call for more employment as a call for a public works program to absorb the unemployed. They imagined a lot of money would have to be poured in. This is not at all what I have in mind.


Narration: This image of creating employment by pouring money into
public works programs is outdated.


Prime Minister: Even after basic infrastructures were in place, a lot of money was used for public works programs to flow money into businesses, which became the goal in and of itself. Sure, this led to employment and to income while money was flowing in the short-term. But once the program was finished, only bears and boars were walking on the completed road. I call this the "First Way".


Narration: The "First Way" trod by bears and boars. Who then chose
the "Second Way"?


Prime Minister: Mr. Koizumi and Mr. Takenaka wanted to make the economy stronger, to streamline. What happened, simply put, is corporate restructuring. But this causes the unemployment rate to increase and disparities to widen. Then people with little income cannot get married and also hardly spend any money. In other words, what may be good for each individual company is, on the whole, really bad for the entire country.


Narration: These two approaches are both outdated today. What
should we do then?


Prime Minister: What is needed is the "Third Way." We must focus on areas where there is demand, generate employment in these areas, and increase production including services. That is what we have to be thinking right now.


Narration: The Government should target areas where there is demand
and support them with policies. For example...


Prime Minister: Look at nursing care, or child care, or medical care, they all generate a useful service, i.e., the caring of people. Caregivers can feel happiness and joy. This in and of itself is a positive thing in terms of how a society ought to be, and will prompt nursing care to grow as a new industry. In Japan, there are still many more areas with such possibilities.


Narration: However, to increase employment, the companies must be
willing to employ new people. The Prime Minister explained how
difficult this was based on real life experience.


Prime Minister: It costs a small-to-medium sized company quite a lot to recruit people. And, as you know, it is quite difficult to know which person is the right match from just one interview. There is a lot of risk involved.


--- You say it is difficult to hire one person at a small business.
Is this also how you felt back when you ran your own patent office?


Prime Minister: Of course.


Narration: In his younger days, the Prime Minister, a certified
patent attorney, actually ran a microenterprise, Kan Patent Office,
which had only one other staff member. In light of his experience,
he discussed the equation from employment measures to economic


Prime Minister: There are people who work as or want to be caregivers, but due to the low salary, they tend not to stay in this work very long. For example, if public finances are used to help increase the salary, this will generate service, i.e. production. Then the unemployment rate will go down, which will help wages go up. Such a model can also be a path to break free from deflation. Further still, GDP will increase, in other words, the economy will grow. At the same time, if people who are not working start to work and earn a salary, they will be paying taxes.


Narration: The agency in charge of the theoretical work to support
this policy is the Economic and Social Research Institute of the
Cabinet Office. Its president and economist, Dr. Yoshiyasu Ono,
directs the work.


Prime Minister: Once a convincing model is developed, I want to incorporate it into one of the mainstream approaches to the budget formulation.


Narration: On the first day of the current extraordinary session of
the Diet, the Prime Minister vowed to take on this challenge.


Prime Minister: I said, we will bolster the creation of demand and employment! This Cabinet will not hand down the major issues which have been put off for the past 20 years to the next generation. I said this Cabinet will tackle these issues, that it will stay true to its word.


--- It will be nice if this blog helps lead to these outcomes.


Prime Minister: Yes. I look forward to sharing my vision for the economy and society.


Latest 5 entries
August 29, 2011
Matters undertaken by the Kan administration:
A general report (5)
Recovery and reconstruction from the great earthquake disaster and transforming Japan's energy policy
August 29, 2011
"Final [Last Spurt] 'Until My Last Day as Prime Minister' ... Activities before Resignation and Beyond."
August 28, 2011
Matters undertaken by the Kan administration:
A general report (4)
Diplomacy and National Security
August 27, 2011
Matters undertaken by the Kan administration:
A general report (3)
Measures Taken from the Point of View of the People as Members of Society at Both the National and Local Levels
August 26, 2011
"No. 27 [Conversion] The Bill to Promote Renewable Energies Finally Passed! Comments from the Prime Minister and Citizens Awaiting its Passage."