“No gains without reforms”
The First Step
in Changing Japan
REFORM WORK SCHEDULE –
A road map for reform of the Japanese economy
Work schedule for reform:
mapping the way for the Koizumi reforms
In June 2001, the Cabinet adopted a blueprint for reform called the
“Structural Reform of the Japanese Economy: Basic Policies for
Macroeconomic Management (hereafter referred to as The Blueprint)” that
sets out the type of society and economy that Japan should aim to build in
the 21st century, and the basic policies for achieving this aim.
It was to flesh out this blueprint and accelerate the pace of reform that the
Council on Economic and Fiscal Policy, in cooperation with government
ministers, put together this schedule for structural reform. This schedule
maps out the way forward for implementing the Koizumi reforms, and
describes the content and timing of the policy measures adopted to
implement the seven reform programs laid down in the reform blueprint.
The government is firmly committed to achieving its self-appointed mission
of implementing structural reform following this road map for reform.
A new society and economy:
where the Reform Work Schedule is leading
Since the finalization of The Blueprint, extensive use has been made of
opportunities such as town meetings to explain the Koizumi reforms. Two of
the commonest questions asked have been “What sort of society and
economy will the Koizumi reforms lead to?” and “What will happen as a
result of implementing the seven programs?”
The structural reforms that we are pursuing are essential to creating a
society and economy with the dynamism to grow and the adaptability to
respond flexibly to changes in the socioeconomic environment. At the same
time, they will bring about major changes affecting both business and
people’s everyday lives. The greatest threat to Japan’s vitality comes,
however, from the atrophy and inability to act brought on by the fear of pain.
While boldly and rapidly transforming Japan’s social and economic
structure, the government will at the same time put in place a secure safety
net to deal with the pain of unemployment and other consequences of
reform. The society that we seek to build is a mutually supportive one
whose members sympathize with the pain of others and who can depend
on one another. Through structural reform, we will build a caring society
brimming with the knowledge and vitality of the individuals who make it up.
The public’s support and understanding of this vision we have of Japan in
the 21st century will be sought, and the measures required to make this
vision a reality will be pursued in collaboration with the people of Japan.
The Blueprint
[Seven programs]
Japan
in the
past
Privatization/
regulatory reform
The “support
challengers” program
Strengthening welfare
and insurance
Doubling our
knowledge stock
Lifestyle revolution
Local independence
and revitalization
Fiscal reform
Fleshing out and acceleration
of implementation of
The Blueprint
Japan
in the
future
Reform Work Schedule
The Reform Work Schedule provides a road map for reform
Reform will take the form of seven programs in three areas:
1. Economic and Fiscal Structural Reform
(1) Creation of a society in which the private sector is free to engage in many
kinds of economic activity
(2) Creation of social systems that reward effort and perseverance
(3) Creation of a streamlined and efficient government in sync with the 21st century
2. Structural Reform of Public Administration
(1) Radical reallocation of roles and responsibilities to local governments to
allocate tasks that can be achieved locally
3. Structural Reform of Society
(1) Creation of a society in which people can lead safe and secure lives
(2) Creation of a powerhouse in terms of science, technology, and human resources
(3) Creation of a society that allows people to live and work as they like
2
3
Japan at present
Privatization/
Regulatory Reform
5
Lifestyle Revolution
6
Local Independence
and Revitalization
4
7
Fiscal Reform
Present concerns include:
Deep negativity about the social and
economic outlook and pessimism about
the aging of the population and consequent decline in the labor force
Debt overhang, inefficiency, high-cost
structure and “sheep mentality” of firms
and industries
Tendency toward the loss of distinctiveness and vitality of regions
Waste and unfair cost burdens in the
areas of social security
The “Support
Challengers” Program
1
Strengthening Welfare
and Insurance
A society in which people are filled with
pride and self-confidence, and in which
those with vision and ambition can
realize their dreams
A society in which market rules and
social justice are a reality
A society in which everyone can lead
safe, secure, and affluent lives side by
side with nature
A society that is open to the world and
attractive to foreigners
Doubling Our
Knowledge Stock
Japan in the future
1
Privatization/ Regulatory Reform
Economic revitalization and creation of a consumer
and resident-oriented society through competition and
technical innovation
Regulatory reform will bring about free competition and active technical innovation, enabling the
provision of a variety of high quality goods and services to the consumer at low cost. The
economy will in addition be revitalized through the expansion of business opportunities and
optimal distribution of resources. In addition to fields directly related to industrial activity, the
government will vigorously pursue regulatory reform in the area of services for consumers. By
promoting privatization, the government will also expand the scope of activity of the private
sector and improve the efficiency of business.
Main points of accelerated concrete measures:
Regulatory reforms in fields directly affecting everyday life
will be accelerated to the maximum extent possible.
Before the fate of other corporations is decided, a conclusion will be
reached and a Cabinet decision made by the end of the year regarding
the abolition, division, or privatization of the four Highway Public
Corporations, the Urban Development Corporation, the Government
Housing Loan Corporation, and the Japan National Oil Corporation.
Maximum acceleration of regulatory reform in fields directly affecting
everyday life
The measures proposed in the “Interim Report on Regulatory Reform in Six Priority Areas” from the
Council for Regulatory Reform will be implemented as quickly as possible, with some measures being
moved forward by one year.
The Council for Regulatory Reform will issue an opinion by the end of the year describing, inter alia, its
views on matters not covered by the Reform Work Schedule, fresh comments, and action in areas other
than the six priority areas, and will revise the “Three-Year Program for Promoting Regulatory Reform” by
the end of the fiscal year.
(To be implemented during FY2001)
Medical care
The adoption of information technology (e.g. for processing bills electronically) will be
promoted, and the participation of the private sector in the examination of bills will be
expanded during FY2001.
(To be implemented immediately)
Expansion of combined use of treatment under public insurance and uninsured
treatment.
(Phased in)
Welfare and childcare
Measures will be taken by joint-stock companies to encourage the participation of care
houses, daycare centers, etc., and to promote the improvement of such facilities using the
PFI (Private Finance Initiative).
(To be implemented immediately)
Registered systems will be introduced for unauthorized as well as authorized daycare
centers, and the quality of childcare services improved. (To be implemented immediately)
Human resources
The maximum placement period for middle-aged and senior workers under the
temporary employment system will be extended from one year to three years.
(Current extraordinary session of the Diet)
The employment agency system will be drastically deregulated by, inter alia, reviewing
the regulations concerning fees payable by hirers.
(To be implemented immediately during FY2001)
Environment
Action will be taken to combat soil pollution in urban areas.
(Conclusion to be obtained during FY2001)
Urban rejuvenation
A new system will be introduced and the Law concerning unit ownership, etc.,
building amended to facilitate the rebuilding of “mansion-style” apartment buildings.
(From FY2001)
2
A system of valuation that takes into consideration the quality and state of
management of housing will be introduced to establish a safe market for the sale and
purchase of used housing.
(From FY2001)
Information technology
A study will be made on the use by the private sector of optical fiber used for highway
and river management, and on the necessary steps to be taken.
(To be implemented during FY2001)
3
The laying of optical fiber for apartment housing will be facilitated.
(To be implemented during FY2002)
Examples of economic effects of regulatory reform
International telecommunications (FY1988 99)
-73.9%
133.5%
Domestic telecommunications (FY1988 99)
-43.1%
111.9%
Domestic aviation (FY1992 99)
-26.4%
17.4%
Petroleum products (gasoline) (FY1993 99)
-25.0%
10.4%
4
6
7
Source: Cabinet Office, “Economic Effects of Regulatory Reform in Recent Years” (June 2001).
Comprehensive review of special public corporations
Toward abolition and privatization
A “Restructuring and Streamlining Program for Semi-Governmental Corporations” covering all public
corporations such as those with special status will be formulated and adopted by the Cabinet by the end
of the year. Before the fate of other corporations is decided, a conclusion will be reached and a Cabinet
decision made by the end of the year regarding the abolition, division, or privatization of four Highway
Public Corporations, the Urban Development Corporation, the Government Housing Loan Corporation,
and the Japan National Oil Corporation.
(By end of December 2001)
Reform of special public corporations will be vigorously pursued in line with the policy of the prime
minister. At such time there will be full disclosure of the operations and financial affairs of special public
corporations, and the merits of reform will be fully explained.
(From October 2001)
The administrative operations of special public corporations will be drastically revised, and bold cuts in
public expenditure on special public corporations will be sought.
(To be funded under the FY2002 budget)
Privatization/
Regulatory Reform
5
Lifestyle Revolution
Increase in demand
Local Independence
and Revitalization
Reduction in price
Fiscal Reform
Field
The “Support
Challengers” Program
1
Research will be launched into new types of elementary and junior high school
management involving, for example, community involvement in public school
management.
(To be funded under the FY2002 budget)
Strengthening Welfare
and Insurance
The criteria for establishment of elementary and junior high schools will be clarified to
encourage the establishment of private schools managed in accordance with a
variety of management philosophies.
(To be implemented during FY2001)
Doubling Our
Knowledge Stock
Education
2
The “Support Challengers” Program
Reviving Japan’s economic dynamism and prosperity
through individual entrepreneurship and endeavor
Japan will be transformed into a “creative breeding ground for entrepreneurs” that will generate new
goods and services sought by people. To do so, a new outlook is required to create a society in
which risk-takers are admired, people are undaunted by failure, and endeavor is rewarded.
However, it is not only the few who will take on new challenges. There will be risks and challenges
for all, be it improving one’s skills, using one’s own judgement to switch one’s assets from savings
into investment, or adapting to changes in the environment. Through such challenges will the
international awareness of Japanese people be increased.
Main points of accelerated concrete measures:
Elimination of the non-performing loan problem within three
years at the most by boosting the disposal of non-performing
loans and revitalizing finance.
Revitalization of industries and startups suited to a new age
Business startup and creation doubling program to revive international
competitiveness (top three international ranking within five years)
Financial support will be enhanced to enable prospective entrepreneurs with the drive and ideas but
lacking collateral to establish startups.
(To be implemented in FY2002)
1,000 business ventures originating from universities will be created in three years by promoting the use
of university Technology Licensing Offices.
(From FY2002)
Business ventures’ access to finance and human resources will be eased by, for example, revising the
stock option system.
(Current extraordinary session of the Diet)
The structure and role of the Fair
Trade Commission will be enhanced
to enable the strict enforcement of
competition policy. The Securities and
Exchange Surveillance Commission
and other supervisory committees will
be strengthened to enhance market
monitoring and discipline.
(To be Funded under the FY2002
budget)
(%)
7.0
Trends in startup and closure rates based on number of enterprises
6.0
5.0
4.0
3.0
2.0
Startup rate
Closure rate
1.0
0.0
1975
78
78
81
81
86
86
91
91
96
96
99(Year)
Source: FY2000 White Paper on Small and Medium Enterprises in Japan.
The use of debtor-in-possession (DIP) financing for enterprises that have initiated reconstructive
bankruptcy procedures will be promoted. Bankruptcy legislation will also be put in place to enable
business operations to be rapidly revived.
(To be implemented during FY2002)
Radical resolution of the non-performing loan problem
Elimination in three years at most
2
3
Financial institutions will be requested to endeavor to further ease funding for sound concerns, including
SMEs.
(By end of September 2001)
Special inspections will be introduced at leading banks, focusing mainly on borrowers whose market
rating fluctuates markedly.
(By March 2002)
Leading banks will be requested to reflect in a timely manner market signals concerning listed
enterprises that are a cause for concern and to set aside sufficient reserves. (By end of September 2001)
The Deposit Insurance Corporation (DIC) and Resolution and Collection Corporation (RCC) will intensively
purchase NPLs until the end of FY2003, having been given greater flexibility in determining purchase
prices. The DIC and RCC will also play an active role in corporate reconstruction. (From October 2001)
4
Lifestyle Revolution
6
7
Rebuilding the financial system to favor investment instead of savings
Steps will be taken to develop an infrastructure that will improve confidence in the securities market
among personal investors, create investment trusts that are attractive to personal investors, and provide
education in investing.
(By March 2002)
Tax proposals will be urgently formulated to help build a highly transparent and fair securities market to
assist the switch in finance from favoring savings to favoring investment.
(Current extraordinary session of the Diet)
Privatization/
Regulatory Reform
5
Local Independence
and Revitalization
Structural reform of the securities market
Fiscal Reform
A corporate reconstruction fund will be established and organizations such as the Development Bank of
Japan, private-sector investors and the RCC will be requested to participate. (By end of September 2001)
The “Support
Challengers” Program
To prevent the collapse of large enterprises and financial institutions from setting off a chain of collapses
affecting SMEs, the safety net guarantee system provided by credit guarantee corporations and safety
net loan program provided by government-affiliated financial institutions will be enhanced.
(From October 2001)
1
Strengthening Welfare
and Insurance
Although a close watch also needs to be kept on the actual conditions regarding, for example, unfair
trading and the use of personal guarantees, a new approach will be adopted whereby a guarantee
system will be introduced to expand loans from private-sector financial institutions using as collateral the
accounts receivable credits of SMEs.
(Current extraordinary session of the Diet)
Doubling Our
Knowledge Stock
Secure safety net for small and medium-sized enterprises
Creation of a judicial system fit for a new age
First fundamental revision of the judicial system in half a century
The government aims to have bills adopted on reform of the judicial system within three years so as to
create a society that operates according to clear rules and in accordance with the principle of personal
responsibility. A bill to promote reform of the judicial system will therefore be submitted at the current
extraordinary session of the Diet, and a headquarters for judicial system reform promotion
will be set up by the end of the year.
(From FY2001)
Corporate law will be radically revised by the next ordinary session of the Diet. Ahead of the initial
schedule, amendments will also be made to the Bankruptcy Law, the Corporate Reorganization Law,
and the Civil Rehabilitation Law by around 2003.
(Ordinary session of the Diet)
3
Strengthening Welfare and Insurance
Reconstruction of social security to create
a secure and sustainable system founded
on the principles of self-help and autonomy
The social security system forms the bedrock of our lives. Without public confidence in the system, it
cannot provide security and stability in people’s lives. The government will rebuild the system to
create a sustainable one that is easy for people to understand, that meets the needs of the times,
and that is founded on the principles of self-help and autonomy.
The Japan of the future will be at the vanguard of efforts to enable the elderly to play an active role
in society, whether in work, play, or volunteer activities. The elderly will also play an important role
as consumers. At the same time, we aim to create a society whose members help one another and
show concern for the weak.
Main points of accelerated concrete measures:
Implementation of measures under the Medical Services
Efficiency-Boosting Program (tentative name) described in
The Blueprint.
Creation of a society in which people can lead safe and secure lives
In tandem with introducing a social security number system using IT, consideration will also be given to
creating a system of “Individual Social Security Accounts” (tentative name) to show the costs and
benefits of social security services for each individual. To do so, surveys will be made of a number of
other countries.
(By March 2002)
To establish a fair and comprehensive system of basic social security and to improve administrative and
other efficiencies, a systematic review will be made of the structure and operation of aspects of the social
security system, such as pensions, long-term care, medical care, and employment systems, focusing in
particular on the better division of functions between each system, redressing the overlap in benefits, and
improving the efficiency with which insurance premiums are collected.
(From October 2001)
A detailed review will be made of the pension system, focusing on a review of pension taxation and the
redesign of the pension system to cater to the diversification of forms of employment, etc.
(From October 2001)
The system of extending unemployment benefits coupled with vocational training will be expanded, and
a system will be established for lending cost-of-living funds (subject to certain conditions) to selfemployed persons who have gone out of business and who are not eligible for unemployment benefits.
(Current extraordinary session of the Diet)
Reconstruction of a sustainable healthcare system
The tentative plans put forward by the Ministry of Health, Labor and Welfare for reform of the healthcare
system will be discussed, proposals for reform finalized, and related bills for reform submitted.
(Ordinary session of the Diet)
Measures will be taken to implement a “Medical Services Efficiency-Boosting Program” (tentative name)
described in The Blueprint.* (Such measures will include expanding the role of the private sector in the
Expansion of long-term care services
The private sector will be allowed to establish care houses, and use will be made of PFI to enable facilities
to be built by the public sector and operated by the private sector.
(Current extraordinary session of the Diet)
3
A variety of business models will be developed for private-sector-operated “Secure Homes” giving the
elderly access to high-quality care services.
(By March 2002)
5
Lifestyle Revolution
6
Local Independence
and Revitalization
7
Fiscal Reform
4
Privatization/
Regulatory Reform
2
The “Support
Challengers” Program
The Medical Services Efficiency-Boosting Program described in The Blueprint consists, among other
things, of the following: (1) standardization of medical care services and revision of the medical fee
system, (2) realization of patient-centered medical services, (3) review of the system for the provision of
medical care, (4) modernization of management practices of medical facilities and improvement of their
efficiency, (5) strengthening functions of consumers (payer, i.e., patient and insurers), (6) review of the
range covered by public National Health Insurance, e.g. provision of medical care through a mix of public
and private services, and (7) moderation of the medical cost burden.
Strengthening Welfare
and Insurance
1
Doubling Our
Knowledge Stock
examining bills, the abolition of ordinances limiting submission of bills by electronic means, the
modernization and improvement of efficiency of hospital management, the expansion of a fixed-amount
system of costs payable to the medical facilities, and the expansion of combined use of treatment under
public insurance and uninsured treatment.
(By March 2002)
4
Doubling Our Knowledge Stock
Creating a powerhouse of knowledge
and human resources
Rich and diverse human resources, technologies and knowledge will continue to form the backbone
for Japan’s economic growth in the future. How people acquire their skills, however, is changing. In
the past, people would be trained in-house by their employers after finishing their higher education.
This is now changing, and individuals are increasingly developing their own skills throughout their
lives and changing employers according to their professional abilities. In the realm of education,
competition will be introduced to create a more individualistic system of education. For us, this
means expanding the range of choice to enable us to choose skills development paths and
education to suit our own tastes. In this way we aim to create a society rich in human resources,
technologies and knowledge that together yield synergies and generate something new.
Main points of accelerated concrete measures:
Enrichment of pool of human resources focusing on adult
members of society.
Acceleration of research and development, and creation of
internationally competitive universities.
Regeneration of Japan as a major pool of human resources
Under targets laid down in the “Education Reform Plan for the 21st Century,” 50,000 adults with
occupational experience will be put into the classroom in three years to boost education in subjects such
as IT and English.
(Current extraordinary session of the Diet)
Action will be taken to promote adult vocational education at technical colleges, and vocational education
for local adults at universities will be promoted to enable adults to further their careers. Practical
specialized graduate schools such as business schools will also be established.
(To be funded under the FY2002 budget)
Measures to boost scholarship schemes and assist self-help efforts by undergraduates and adult
members of society will be studied.
(To be funded under the FY2002 budget)
An IT literacy program will be introduced to improve the general public’s information literacy and raise
the IT teaching skills of teachers.
(To be implemented during FY2002)
Creating a nation built on a platform of scientific
and technological creativity
Support will be provided for research and development in the four new priority fields of the life sciences, IT, the
environment, and nanotechnology and materials. Project selection will be improved by introducing external
assessment and publicly disclosing the results of assessments. (To be funded under the FY2002 budget)
Competition will be introduced into the research environment and funds aimed toward high quality,
conceptually outstanding research will be doubled.
(By March 2002)
The development of technologies and creation of new industries will be promoted through collaboration in
science and technology at the local level between industry, universities, and government.
(Current extraordinary session of the Diet)
Legislation required for the Information Age will be introduced, including legislation concerning the
protection of personal data, establishment of rules on provider liability, and the announcement of general
shareholder meetings via the Internet.
(Current extraordinary session of the Diet)
Bills will be submitted to the next ordinary session of the Diet to enable the performance online of
administrative procedures to pave the way for digital government. Arrangements for filing applications
and notifications online will be brought forward, and support will be provided for pioneering local
governments to develop general-purpose systems for use by local governments. Use of IC cards jointly
usable by a number of local governments will also be promoted.
(By March 2002)
One-stop shopping services at ports will be introduced by FY2003.
(From FY2001)
2
3
Development of “Top 30” group of world-class universities
To enable national universities to gain corporate status sooner, conclusions will be finalized concerning,
inter alia, the choice of employment of non-government employees as university employees, the
clarification of management responsibilities, and the introduction of private sector management techniques.
(By March 2002)
Reorganization and integration plans will be drawn up for national universities to make them
internationally competitive.
(To be implemented during FY2002)
4
5
Lifestyle Revolution
6
Local Independence
and Revitalization
Promotion of individualistic elementary and secondary education
7
Fiscal Reform
To cultivate a “Top 30” group of world-class, internationally competitive national, public, and private
universities, competition will be introduced through third-party assessment and the prioritized allocation
of investment.
(To be funded under the FY2002 budget)
Schools are a living space for learning.
The establishment criteria for schools will be clarified to encourage the establishment of private
elementary and junior high schools offering education based on a diverse range of educational
philosophies.
(By March 2002)
To revitalize elementary and junior high schools, research will be undertaken on new types of school
administration, including community participation in the running of public schools.
(To be funded under the FY2002 budget)
Privatization/
Regulatory Reform
Model IT projects (“e! Projects”) will be developed that show the general public and the world at large
that Japan is at the forefront of the digital revolution. Particular attention will be paid to providing the IT
required for the FIFA World Cup.
(To be implemented during FY2002)
The “Support
Challengers” Program
1
Strengthening Welfare
and Insurance
High-speed Internet access will be provided at locations such as schools and libraries together with the
necessary peripheral IT infrastructure.
(By March 2002)
Doubling Our
Knowledge Stock
Turning Japan into a world-leading digital state by 2005
10,000 IT experts will be sent into elementary, junior high and high schools to encourage the use of IT.
(By March 2002)
5
Lifestyle Revolution
Creating a society based on mutual help and concern
for others where people can live and work as they like
We hope to create a society in which people are free to live and work as they like. To do so, the
government will first take all necessary steps to combat unemployment, which represents the
biggest concern of many people. Measures will be taken to minimize the pain of unemployment, and
all possible steps taken to enable the unemployed to gain reemployment. We will also build a society
in which people are free to live and work as they like regardless of sex or age. Stress has
traditionally been placed in Japan on mutual help and on living close to nature, and these qualities
will be preserved to make Japan an attractive example for the rest of the world.
Main points of accelerated concrete measures:
Further enhancement of the employment safety net (e.g. by
eliminating the mismatch between supply and demand, by
creating employment, and by improving vocational training).
Active use of NPOs to contribute to people’s quality of life.
Halving of waste, doubling of nature.
Development of a secure safety net
Use will be made of all kinds of educational training facilities, such as private sector educational training
institutes, universities, and NPOs, to provide effective vocational training for middle-aged and senior whitecollar persons who left their previous jobs, and unemployed persons.
(Current extraordinary session of the Diet)
To create employment according to local needs, emergency and temporary employment will be created in
the public sector. Positions will include assistant schoolteachers, police support personnel, and forestry
workers to protect the environment.
(Current extraordinary session of the Diet)
Putting the right people in the right place in the labor market,
and creating fresh employment in the service sector
To reduce the mismatch between supply and demand in the labor market and to put the right people in
the right place, an online job search service (“Job-net”) and career counseling service will be improved,
reemployment support will be expanded using private sector resources, provision of skills development
programs by universities, etc., will be encouraged, and recruitment and employment age restrictions will
be eased.
(Current extraordinary session of the Diet)
Employment will be created in service industries, such as care services for the elderly, childcare
services (daycare centers and after-school children’s club) and transport services which will help cater
for the various essentials of everyday life.
(From current extraordinary session of the Diet)
Elimination of waiting children to enter daycare centers and
improvement of facilities to accept school-age children after school
The number of daycare places will be immediately increased for 150,000 children by FY2004 through publicprivate partnerships (private sector operation of daycare centers built by the public sector). The number of
after-school facilities will be expanded to 15,000 by FY2004.
(Current extraordinary session of the Diet)
Halving of waste and doubling of nature by 2010
In addition to promoting the development of waste disposal facilities that comply with the tightened
regulations on dioxin emissions, steps will also be taken to develop waste disposal technologies and
reverse manufacturing, and to revitalize the recycling business. (To be funded under the FY2002 budget)
2
A citizen-based movement striving for garbage reduction will be launched.
(To be funded under the FY2002 budget)
Projects aimed at restoring wetlands and upland areas to their natural state will be promoted, and citizen
involvement in them will be encouraged.
(To be funded under the FY2002 budget)
In order to facilitate the removal of abandoned waste, “waste maps” will be drawn up with local input.
(To be implemented from October 2001)
3
Use of NPOs, citizens and industry to cut greenhouse gases by 6%
and to create a sustainable economy and society
Steps will be taken to combat global warming by, for example, putting in place the necessary
infrastructure to implement commitments under the Kyoto Protocol and launching a national campaign
to prevent global warming.
(To be funded under the FY2002 budget)
4
To help develop the infrastructure required to implement commitments under the Kyoto Protocol, studies
will be made of market-based instruments such as emissions trading and environmentally related taxes.
(By March 2002)
Lifestyle Revolution
6
7
Making housing more comfortable and easier to sell
Information on home renovators will be provided via the Internet.
(By end of September 2001)
Development of the used housing market will be stimulated through the introduction of standards on
used housing valuation and performance rating.
(To be implemented during FY2002)
Urban rejuvenation and improvement of attractiveness
and competitiveness
Urban rejuvenation will be promoted by selecting urban rejuvenation projects, using PFI and drastically
revising city regulations. To make cities safer and more resistant to disasters, a general plan will be drawn
up for creating disaster prevention bases in key locations across a wide area around Tokyo Bay.
(To be implemented during FY2002)
Privatization/
Regulatory Reform
5
Local Independence
and Revitalization
Low-emission vehicles will be used for all 7,000 or so general official utility vehicles. (By March 2005)
Fiscal Reform
The basic plan for the creation and promotion of the recycling society will be drawn up.
(To be implemented during FY2002)
The “Support
Challengers” Program
1
Strengthening Welfare
and Insurance
Support for after-school children’s club will be expanded, and the system of support for after-school and
weekend children’s activities will be developed.
(To be funded under the FY2002 budget)
Doubling Our
Knowledge Stock
Stations that accept children from (and send them to) daycare centers and childcare facilities located next
to stations will be expanded, and daycare outside hours at kindergartens will be developed.
(To be funded under the FY2002 budget)
6
Local Independence and Revitalization
Creating distinctive regions where people want to live,
go, and be involved
Arrangements and standards regarding the administration and projects of local governments have
traditionally been laid down by the state, and uniform government services have been provided
throughout the country. This setup has increased regional dependence on the state, foisted the
inefficiencies of the state on local governments, and failed to make the most of the distinctive features
of individual regions. Change is needed to enable local governments to develop their own regions and
government services using their own judgement and relying on their own revenue sources. In regions
facing problems such as underpopulation, municipal amalgamations and the performance of public
administration over a wider area need to be pursued. This does not mean to say, however, that
individual regions will lose their distinctiveness. Rather, distinctive regions where many people want to
live, go, and be involved will be formed through the application of knowledge and innovation.
Main points of accelerated concrete measures:
Development of science, technology and education utilizing
distinctive regional characteristics.
The allocation of roles and programs between the state and local
governments will be revised, and municipalities boldly reorganized.
Creation and preservation of the beauty of Japan
Creation of science, technology and education utilizing distinctive
regional characteristics
Measures will be taken to encourage the development of technologies and new industries by promoting
regional scientific and technological cooperation between industry, universities and government.
(Current extraordinary session of the Diet)
1,000 ventures originating from universities will be created in three years.
(From FY2002)
Reallocation of roles and systems between the state
and local governments, and bold municipal reorganization
An attempt will be made to create a mechanism for reallocating roles and responsibilities according to the
size of local governments (e.g. by giving a greater role and responsibilities to local governments with a
population of at least 300,000, and reducing the role and responsibilities of small municipalities and
handing them over to prefectural governments) at the 27th meeting of Research Project on Provincial
Systems.
(By March 2002)
Cooperative action will be taken by central government agencies and the amalgamation of municipalities
will be vigorously pursued in accordance with the Support Plan for the Merging of Cities, Towns and
Villages. Targeted publicity and public awareness activities will be conducted from October 2001.
(From October 2001)
Reform of local government finance
The system of state subsidies will be rationalized and local transfer taxes reviewed, and a root-andbranch study made of the allocation of tax revenue sources between the state and local governments
Spending under local government finance projects will be thoroughly reviewed and allocated on a priority
basis to curb the scale of plans and so reduce the shortfall in local government tax revenues and contain
borrowing.
(To be funded under the FY2002 budget)
Creation and preservation of the beauty of Japan
2
Rural communities will be revitalized and their coexistence alongside urban areas will be encouraged by
promoting interaction and the circulation of people, things and information between urban and rural areas
to create and preserve the beauty of Japan.
(To be funded under the FY2002 budget)
Forestry development projects will be reorganized according to the three goals of preserving soil and water
resources, coexistence with nature, and the recycling of resources. (To be funded under the FY2002 budget)
A qualitative shift will be made toward environmentally friendly public works in the agriculture, forestry,
and fishery sectors.
(To be funded under the FY2002 budget)
3
Improvement of self-sufficiency in food and reform of agriculture,
forestry, and fishery sectors
Structural reform of rice cultivation based on a complete overhaul of the production and distribution
system will be fleshed out by around November.
(From October 2001)
4
Privatization/
Regulatory Reform
5
Lifestyle Revolution
The details of structural reform in agriculture (through, for example, increasing private capital
participation and the conversion of agricultural concerns to form joint-stock companies) will be urgently
worked out.
(From October 2001)
6
Local Independence
and Revitalization
The study of measures for stabilizing business incomes in the agriculture, forestry and fishery sectors
will focus on the minimum steps necessary to assist the development of the prime movers in these
sectors based on obtaining public understanding.
(By the end of September 2001)
7
Fiscal Reform
To strengthen the competitiveness of domestic areas of production that do not need to be protected by
safeguards, measures will be pursued to rationalize the production and distribution of vegetables and to
respond to the revolution in consumption patterns.
(By end of September 2001)
The “Support
Challengers” Program
1
Strengthening Welfare
and Insurance
The graded system of compensation used in the calculation of local transfer taxes will be revised, and
concrete proposals drawn up concerning public works modification. To increase the incentive to secure
tax revenues, revision of the withheld revenue rates will be considered.
(By March 2002)
Doubling Our
Knowledge Stock
(including the transfer of tax revenue sources) in the light of how roles and responsibilities should be
allocated between the state and local governments.
(From October 2001)
7
Fiscal Reform
Restoring the medium to long-term sustainability of
public finances and ensuring inter-generational fairness
The budget deficit, which is expected to reach ¥666 trillion by the end of FY2001 adding together spending
by both the state and local governments, will be reduced to create a streamlined, efficient government
appropriate for the 21st century. This necessitates that the rigidity of public investment be broken down,
and that social overhead capital be developed more efficiently. A shift is underway in public finance, away
from bricks-and-mortar projects and toward the development of services and other elements of intangible
infrastructure. Moreover, the allocation of roles between the state and local governments needs to be
reviewed. Moves are already underway to create a completely new budget-making process for developing
well-balanced budgets with clear priorities. In the FY2002 budget, for example, preferential allocations will
be made to seven priority fields while keeping the issuance of government bonds under ¥30 trillion. The
Council on Economic and Fiscal Policy will play a central role in this.
Main points of accelerated concrete measures:
Compilation by a completely new budget-making process of a
well-balanced FY2002 budget with clear priorities.
Reform of public investment
A “Big Bang” in public investment
Special revenues from sources such as roads will be reviewed during the compilation of the FY2002
budget.
(To be funded under FY2002 budget)
A comprehensive review will be made of the direction and necessity of long-term plans by the end of
FY2001, and a basic conclusion will be reached by the end of the year concerning Long-Term Plan for
Fisheries Infrastructure.
(By March 2002)
Selective reviews will be made of public works projects such as large-scale dams, local ports, and
airports. More than 800 works projects that have been in progress for a prolonged period following their
adoption will be reassessed, and appropriate steps, such as cancellation of projects not expected to
progress, will be taken.
(To be funded under the FY2002 budget)
The public works undertaken by special public corporations will be strictly reviewed in line with the
reform of special public corporations.
(To be funded under the FY2002 budget)
Online bidding will start to be introduced for public works projects under the direct control of the Ministry
of Land, Infrastructure and Transport from October 2001, and introduction completed one year earlier
than planned during FY2003.
(From October 2001)
A review of Designated Competitive Bidding system will be undertaken and the use of open and
competitive bidding will be expanded in consideration of reducing the participation of inferior, securing
proper implementation, and raising the efficiency of public works projects.
(By March 2002)
Reports will be requested from the relevant ministers when future budgets are compiled concerning, inter
alia, the reform of key programs such as the health insurance system, and these will be deliberated by
the Council on Economic and Fiscal Policy.
(By March 2002)
To assist in the adoption of private sector management techniques in the public sector and to deliver
more effective, higher-quality services, concrete measures will be clarified for their systematic
introduction in policy assessment, public accounting, and budget and personnel management.
(By March 2002)
2
3
Main features of criteria for demands for FY2002 budget allocations:
Privatization/
Regulatory Reform
5
Lifestyle Revolution
General policy spending will be cut 10% from the previous fiscal year, and “special demands for
structural reform” added to encourage the prioritization of allocations to the seven key areas. The
demands of ministries and agencies relating to these “special demands for structural reform” will
be considered and adjusted by cabinet bodies such as the Council on Economic and Fiscal
Policy by the end of September to ensure a comprehensive, coordinated budget.
4
6
Local Independence
and Revitalization
Public investment related spending will be cut by 10% from the previous fiscal year, and the
priority placed on seven key fields.
7
Fiscal Reform
The government aims to keep issuance of government bonds under ¥30 trillion.
The “Support
Challengers” Program
Medium-term economic and fiscal plans will be prepared by around the end of the year. To contribute to
their formulation, a macroeconomic model will be developed to paint an integrated picture of the
economy, public finance, and social security.
(By March 2002)
1
Strengthening Welfare
and Insurance
Requests for allocations for the seven priority areas will be considered by cabinet bodies such as the Council
on Economic and Fiscal Policy, the Council for Science and Technology Policy, the IT Strategic
Headquarters, and the Urban Renaissance Headquarters so as to ensure the formation of
comprehensive, coordinated policies and a well-balanced budget.
(By end of September 2001)
Doubling Our
Knowledge Stock
Compilation of FY2002 budget with clear priorities
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