(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

March 6, 2018

(Introduction)

I am Taro Aso, Minister of Finance and Minister of State for Financial for Financial Services.
　For starting this meeting of the committee, I will present my key policy directions on fiscal policy, financial administration, and other affairs at this committee.
 

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

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 tackle the biggest long term challenges of falling birthrate and aging population, with both “Supply System Innovation” and “Human Resources Development Revolution” as the two wheels, based on the New Economic Policy Package adopted in December last year.

　We will use part of the revenue increase from the consumption tax rate hike to 10%, which is scheduled for October 2019, as a source of funds for Human Resources Development Revolution. As a result, it will become difficult to achieve the goal of bringing the primary balance into surplus by FY2020, but we will firmly maintain the goal of bringing the primary balance into surplus by FY2020 while upholding the goal of fiscal consolidation. To achieve this goal, we will set forth a concrete and highly effective plan under the Basic Policy on Economic and Fiscal Management and Reform for this year.

 (Outline of the budget and the tax reform for FY2018)

Next, I will explain the outline of the budget and the tax reform for FY2018.

　In consideration of the “New Economic Policy Package”, we have prioritized important challenges such as expanding nursery facilities and promoting investment by core regional companies in equipment and human resources under the budget for FY2018. At the same time, the budget is intended to achieve economic revitalization and fiscal consolidation simultaneously by achieving targets concerning general expenditure and other items under the Plan to Advance Economic and Fiscal Revitalization and by reducing the issuance amount of government bonds for the sixth consecutive year since the inauguration of the Abe cabinet.

　As for the tax reform for FY2018, individual income taxation will be reviewed in reaction to diversification of people’s working styles, and taxation measures will be revised to spur wage hikes and productivity enhancement in order to overcome deflation and achieve economic revitalization. Moreover, the tax system for business succession will be expanded to facilitate business succession of SMEs, and International Tourist Tax will be introduced to finance tourism promotion. In addition, we will also revise domestic laws related to the international taxation system, promote electronic tax filing and revise the tobacco tax.

　Regarding matters related to the procedures for management and disposal of government assets that were pointed out in the Diet, in consideration of the opinion of the Fiscal System Council, we will make revisions under the policy of clarifying the procedures, securing the objectivity of sales prices and thoroughly ensuring appropriate administrative document management.

 (Basic concepts of current financial regulatory policies)

Next, I will elaborate on the current financial services' policies.

　To secure a virtuous economic cycle, we will endeavor to find appropriate solutions for emerging issues with forward-looking approaches. In addition, we will continually strive to change the impression of the Financial Services Agency from the Financial Sanction Agency to the incubator of financial businesses.

　As for our review on the monitoring methods, we have recently published the draft report “JFSA’s supervisory approaches –Replacing checklists with engagement—.” Based on this, we will proceed to make reviews through communication and discussion with multiple stakeholders.

　Moreover, we will conduct in-depth dialogue with financial institutions while monitoring economic conditions and financial markets both domestically and internationally in order to maintain the long-term soundness of Japan’s financial system and to facilitate financial intermediation amid the evolving financial environment.

　Furthermore, the “Dollar-Cost Averaging NISA (TSUMITATE NISA)” started from January 2018, which is aimed at encouraging households to enroll in long-term, cumulative and diversified investments from a small amount. We will continue to promote the diffusion of the “Dollar-Cost Averaging NISA” towards realization of households’ stable asset-building and encourage financial business operators to take initiatives toward customer-oriented business conduct.

　Regarding the international financial environment, we have reached the final phase of financial regulatory reforms to prevent financial crises. We will further contribute to resolving emerging challenges that are common to Japan and abroad by sharing information and exchanging views with other countries.

　In addition to the above-mentioned issues, we will take appropriate measures to deal with virtual currency exchange services from the perspective of protecting users, in light of recent issues related to virtual currencies.

 (Bills to be submitted to the ordinary Diet session)

　The bills which we will ask you to deliberate on, related to the Ministry of Finance, are the Bill for Partial Revision of the Income Tax Act, etc., the Bill to Introduce the International Tourist Tax, and the Bill to Partially Amend the Customs Tariff Act, etc.

　Furthermore, the bill related to the Financial Services Agency is the Bill to Partially Amend the Act for Partial Revision of the Insurance Business Act, which has been carried over from the previous Diet session. This is currently being deliberated by the House of Representatives.

　We will explain the details of these bills later, so I hereby ask you to deliberate on these matters and give your early approval.

(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)