I’m Yasuo Tanaka, speaking on behalf of New Party Nippon and our parliamentary group partner, the People’s New Party.
People’s New Party leader Mr. Shizuka Kamei gave an admonition at a regular party convention of the Democratic Party of Japan. He asked if the party really believes it can set sail safely in a rainstorm with self-induced headwinds of TPP and the consumption tax hike.
Mr. Yoshihiko Noda. Many people in Japan are doubtful about your seemingly-powerful slogans and concerned about what will happen to the future of the proposed tax increase, TPP and radiation. We now live in a perverted society which sides with the strong and crushes the weak. That’s a parochial society of false equalitarianism which tends to deny people’s individualities. That’s not the society we aspire for. We must achieve social justice and economic freedom simultaneously. We must restore the dignity of a decent society in which everyone can live the life of a middle class citizen. In order to establish a society with a fair tax code, fair trade and fair access to resources, we need to carry out drastic reform based on a new equation.
Mr. Noda, you said implementing stopgap measures over and over again every year won’t work any more and pledged to raise the consumption tax. But isn’t it yet another quick fix, putting off till tomorrow what you must do today?
Seventy percent of the limited companies in Japan pay no national corporate tax or regional business tax. Sixty-six percent of Japan’s super large corporations which are the members of the Japan Business Federation (Nippon Keidanren) file consolidated tax returns and don’t pay any tax at all. You too acknowledged that at the plenary session of the diet last November. Only 30 percent of all the companies in Japan pay taxes and are forced to shoulder the heavy burden for being honest. This absurdity is worse than the controversial vote-value disparity and is caused by a system in which companies are taxed on profits.
New Party Nippon and the People’s New party have repeatedly demanded the introduction of a fair, pro forma standard taxation system under which taxes are imposed on corporate expenditures instead of profits and collected widely and thinly. In my last questioning, I told Mr. Noda when the government plans to introduce new taxes, it needs to deliberate cautiously on its purpose and impact beforehand. It’s the same thing with tax hikes. If the government wants to raise the tax rate, it needs to deliberate on the goal and impact from it thoroughly.
No country in the world has ever succeeded in bolstering its economy by tax increases. There’s one more thing New Party Nippon and the People’s New Party have repeatedly called for. It’s the introduction of an Invoicing system to eliminate unfairness caused by the current export drawback system which allows exporters to make refund claims for the consumption tax they pay while manufacturing products in Japan.
Invoicing is indispensable in certifying how much consumption tax each company pay in numerous intermediate stages of manufacturing and distribution. And Japan is the only country among the leading industrialized countries which hasn’t introduced the Invoicing system.Export drawbacks reaching 3 trillion yen a year are claimed and collected only by the final distributors including super large automakers, electronic appliance, machineries and electronics companies. Small and medium-sized companies which supply materials or produce components don’t benefit from the export drawbacks system at all
If the consumption tax is raised to 10 percent, the amount of refunds which go to big corporations will double and reach 6 trillion yen. This is absurd!
Mr. Noda was rather dismissive on the issue as well, responding to my questioning the last time. The two-step tax hike would impose even heavier administrative burden on business operators because they would have to change their register software each time.
The introduction of the Invoicing system would be great news for small and medium-sized businesses. Times are different now from 23 years ago when the consumption tax law took effect. Even a small family-run store takes care of tax matters on computers by now.
Why are you dragging your feet on the Invoicing system? Why not take action against Ekizei (consumption tax revenues normally pocketed by small businesses under the current system) and continue allowing super large businesses to benefit 3 trillion yen a year? Is it a fair tax system? Please make your case so the public can understand. .
(Ekizei is a term used when people talk about the measure allowing small businesses to pocket Con Tax revenues by exempting them from using invoices that would leave a paper trail for the tax authorities. It’s virtually legal profit that one makes by charging consumption tax when not required to. Ekizei literally means ‘profit and tax’ in Chinese characters)
There’s more. Mr. Katsuya Okada says even after the consumption tax is raised to 10 percent, more tax increases will be needed. Is that because the rate of the British VAT(value added tax), which is comparable to the Japanese consumption tax, is 17.5 percent? And Japan is seeking to become a society of ‘medium-burden for medium welfare like Britain?’But I have to tell you, Mr. Okada, the real VAT rate in the UK is below 10 percent.
In Britain, medical care, education, welfare, insurance are tax-exempt. No tax is imposed on food, medical products, public transportation and housing construction, either. The tax rate on electricity and gas is 5 percent lower than 17.5 percent imposed on the remaining items that are taxable. If that’s computed to Japan’s flat tax rate system, Britain’s consumption tax rate is 9.8 percent, according to several economic research institutes. And yet, Britain is a society of ‘medium-burden for medium welfare’
Mr. Okada says even 10 percent isn’t high enough. But my take is different. I believe there’s something wrong in the Japanese system in which tax revenues aren’t spent wisely at all. Mr. Noda, please remember what you said during the last general election. You said, ‘Termites are attacking us and will we raise the consumption tax without eliminating them?’ Mr. Noda, have you finished the work you pledged to complete?
An opinion poll shows about 80 percent of the eligible voters support a reduction in the number of the diet members and pay cuts for national public servants. But that’s not sufficient. That’s only one of the necessary. Am I wrong about this?
Mr. Okada, our pension system has virtually collapsed. And yet, over 3 trillion yen is being spent on social welfare and some recipients are better-off than some pensioners. Just fiddling with the numbers won’t solve the problem fundamentally. We need to drastically change the system and our mindset.That’s why we champion the need to introduce a Basic Income Guarantee, a system of social security which regularly provides each citizen with a flat sum of money every month. The payment goes to everyone including babies and the elderly people. We also champion the need to introduce a Basic Job Guarantee as a community-based project which guarantees every adult 20 hours of work and wage per week.As for TPP, China, South Korea and Taiwan aren’t participating in the TPP. None of the fast-growing Asian economies such as Indonesia, Thailand or the Philippines, is participating. Then, how can we possibly reap the benefits of the economic growth in Asia?
Mr. Noda, you are teaming up with Mr. Hiromasa Yonekura, the chairman of the Keidanren (Japan Business Federation) in promoting TPP. Incidentally, the gentleman is the chair of the Sumitomo Chemical Company which has a long business ties with Monsanto Company, notorious as the producer of Agent Orange used in US military operations in Vietnam. The company now enjoys over 90 percent of the market share in genetically-modified products.
TPP is an obvious anachronism. It’s the block economy whose sole winner is the US. For Japan, it’s trade inhibition agreement.
As anticipated, the American Council of Life Insurance has sent a letter to the Office of the US Trade Representative, saying Japan must immediately settle for the longstanding issue of postal life insurance and fraternal insurance if it wishes to join the TPP.
Mr. Noda, you have pledged to carry out postal reform and allow post offices to provide all three services (postal, banking and life insurance) to make it more convenient for the public. You said you will make it happen during this diet session. But, Mr. Noda, it’s almost like chasing two rabbits at a time. You cannot have it both ways. There’s more. The American Automotive Trade Policy Council or AAPC, comprising three leading automakers, has also issued a statement. It says it opposes Japan’s participation in the TPP for now. The council is demanding the repeal of Japan’s original light motor vehicle standards, calling them irrational because they only benefits domestic manufacturers. AAPC is now saying Japan must be obligated to open its market to increase American car imports before it’s allowed to participate in the TPP.
Here is what Mr. Noda told the nation in his policy speech.I quote, ‘I love this country, and I want to protect it. I want to take this beautiful homeland of ours into the future,’ unquote.With this message in mind, would you dare eliminate the light motor vehicle standards which the US insists on recognizing as non-tariff barriers? Would you do that even though the repeal would result in job losses in Japan?
Would you dare to destroy idyllic farm roads and beautiful alleys in the ancient city of Kyoto? Or are you planning a huge package of public works projects and build roads in the town so American cars can pass through them comfortably? And won’t care a thing about snowballing budget deficits?
People are saying ‘don’t steal our job, don’t destroy our country.’ There’s an unstoppable movement against TPP which is a wolf in sheep’s skin. It goes beyond right and left. It’s a new movement that transcends ideologies.
Mr. Noda, please remember the diet resolution 10 members of the lower house including me sponsored just before you left for the APEC summit in Honolulu, Hawaii, the birthplace of the US President Barak Obama. We said Japan should not announce its intention to participate in the TPP talks. It took only two and a half days for 232 lawmakers, almost a majority of the lower house, to join and sign the document.
A lot of members from all parties and parliamentary groups but Your Party agreed to sign the document because they all agreed Japan should first conclude free trade agreements with ASEAN plus 6 nations including China, South Korea, India, Australia, BEFORE partnering with the US, our ally. We all agreed that’s the strategy Japan should pursue.
On the other hand, the Wall Street Journal was the first at home and abroad to carry an exclusive interview with Mr. Noda on September 21, immediately after he took office.
The article says, quote, ‘Japanese Prime Minister Yoshihiko Noda, brushing aside mounting popular opposition to nuclear power, said he was determined to restart idled reactors by next summer, adding that it was “impossible” for the country to get by without them or to consider a quick phaseout of nuclear energy, unquote. Do you still hold this view?
I also heard bureaucrats are already briefing embassy officials in Tokyo on the planned resumption of operations at about 10 nuclear power plants, even before the new Nuclear Regulatory Agency kicks off the ground. Is this news to you? Am I just hearing things? Or, did the order come from you and Mr. Yukio Edano?
The area surrounding the Fukushima Daiichi nuclear power plant which experienced full meltdown should be declared a territory ‘occupied by’ radiation. The area at least within 30 kilometers from the crippled power plant should be declared off-limits. Residents who decide to leave their beloved-hometown should be provided with new homes and guaranteed jobs by the government. That’s because it’s the responsibility of the government to protect the lives of the people and their property.
That’s what I proposed at a meeting of the nuclear accident investigation commission set up by both houses of the diet. The New York Times also wrote in a December 6th article, quote, ‘Critique counter that the effort to clean Fukushima Prefecture could end up as perhaps the biggest of Japan’s white-elephant public works projects,’ unquote.
Decontamination or cleanup efforts would only help transfer radioactive substances elsewhere and cause yet another tragic internal radiation exposure among workers.
Kyoto University, Tsukuba University and the Meteorological Research Institute jointly conducted a study which found the amount of radioactive cesium leaking from the Abukuma River in Fukushima Prefecture to the Pacific Ocean reached 500 becquerel per day.
Mr. Edano kept telling the news conference, ‘It’s safe for now.’ Mr. Goshi Hosono is still saying repeatedly, ‘It’s safe by now.’ I believe the fundamental answer to the challenging issue is to order residents to evacuate the area, even if that means risking your life on the job. Otherwise, people will never agree to the injection of trillions of yen in their hard-earned tax money to TEPCO, Tokyo Electric Power Company, whose president Toshio Nishizawa appalled many at a news conference by saying, ‘The utility companies have the duty and the right to raise their rates.’
Temporary nationalization of the utility would protect banks’ credit, increase post-retirement jobs for government employees, obscure where responsibility lies and force people to bear the burden. It’s utterly irresponsible.
That’s why, at the end of last year, Mr. Kamei and I urged Mr. Noda to learn a lesson from the privatization and the separation of the Japanese National Railways and have a fair-minded spirit to split the utility into a new and old companies.We called for the establishment of a highly independent nuclear safety regulatory commission based on the article 3 of the National Government Organization Act and the establishment of a system under which the state takes responsibility in securing safety for the residents.
Why did the commission, which should have been based on the article 3 and independent of the Cabinet as written in the DPJ manifesto, end in a wimpy deal?
Mr. Noda, you pledged to deliver what’s on the Manifesto even if it meant risking your own life. You said, ‘That is the rule,’ and I can’t agree with you more.
With my pledge of cooperation and expectations towards guts and grace on the part of the DPJ, I would hereby conclude my representative questioning on behalf of New Party Nippon and the People’s New Party.
I’m Yasuo Tanaka, speaking on behalf of New Party Nippon and our parliamentary group partner, the People’s New Party.