(Provisional translation)

Policy Statement by Taro Aso, Minister of Finance and Minister of State for Financial Services, at the Committee on Financial Affairs of the House of Councillors

November 30, 2017

(Introduction)

I am Taro Aso, Minister of Finance and Minister of State for Financial Services. For starting this meeting of the Committee, I will make a brief address.

(Current state of the Japanese economy and basic approach to fiscal policies)

　With respect to the current state of the Japanese economy, as a result of efforts made by the Abe Cabinet so far, the virtuous cycle of the economy is being realized steadily against the backdrop of significant improvement in the employment and income situations.

　In order to further ensure this positive cycle of the economy and achieve sustainable economic growth, we will compile the New Economic Policy Package in December, with both “Supply System Innovation” and “Human Resources Development Revolution” as the two wheels, and tackle the biggest challenges of falling birthrate and aging population.

　We will propose a two million yen-scale policy package to realize the “Human Resources Development Revolution”. A part of the revenue increase from the consumption tax rate hike to 10% will be used to finance the package while upholding the goal of fiscal reconstruction. We adhere to the goal of bringing the primary balance into surplus. To this end, we will propose a concrete plan in carrying out the reforms in both revenue side and expenditure side.

　For the time being, we will respond to the supplementary fiscal demand inclusive of disaster management, and will address high-priority issues in challenging the “Productivity Enhancement Revolution” and the “Human Resources Development Revolution”. Besides, for realizing disaster prevention and disaster impact mitigation, and for strengthening competitiveness of agri-, forestry- and fishery- industries based on the “Comprehensive TPP Related Policy Framework,” we will propose the FY2017 supplementary budget.

　FY2018 is the final year for intensive reform in the “Plan to Advance Economic and Fiscal Revitalization.” Based on targets concerning general expenditure and other items, we will continue the initiatives towards the reform across the overall expenditures taken so far by the Abe Cabinet, and propose a well-balanced budget by focusing on the high-priority issues set by the Abe Cabinet.

　As to tax systems, based on the “Basic Policy on Economic and Fiscal Management and Reform 2017,” we will review the structural reform of the tax systems taking into consideration the structural changes in the economy and society, in accordance with the discussions in the Government Tax Commission.

 (Basic concepts on the financial regulatory policy)

　Next, I would like to elaborate on the financial services' policy.

　To firmly establish a virtuous economic cycle, we will endeavor to find appropriate solutions for the emerging issues with forward-looking prospects. In addition, we will continually strive to change the impression of the Financial Services Agency from the Financial Sanctions Agency to the incubator of financial businesses.
　
　Moreover, we will review the monitoring approaches to adopt to the changes in the environment relevant to the financial services' policy.

　In order to maintain the long-term soundness of financial system and to smooth the financial intermediation in declining population, we will carefully monitor the economic conditions and financial markets both domestically and internationally, and conduct in-depth dialogue with financial institutions.

　Furthermore, for the realization of households’ stable asset building, we will promote the long-term, cumulative and diversified investment starting from a small amount. In this regard, the "Dollar-Cost Averaging NISA" will start from January 2018, and we encourage financial institutions to take initiatives toward customer-oriented business conduct.

　The bills which we will ask you to deliberate on, related to the Financial Services Agency, is the Bill to Partially Amend the Act for Partial Revision of the Insurance Business Act. It is aimed at extending the special arrangement, which is to expire at the end of March 2018, regarding the underwriting limits of insurance allowed to small-claims and short-term insurance business operators. To deliberate on this bill, it is important to consider benefit of insurance policy holders by extension of the special arrangement.

(Conclusion)

In this speech, I have stated my ideas relating to fiscal policy, financial administration, and other affairs. I am determined to continue, with your support, to do my best in policy management. I would appreciate understanding and cooperation of Chairman Hasegawa and all the other members of the committee.

(End)