(Provisional translation)

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

October 29, 2019

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

(Introduction）

　I am ASO Taro, Minister of Finance and Minister of State for Financial Services. As we start this meeting of the committee, please allow me to give a short address.

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

　The Japanese economy is recovering at a moderate pace. Stable fundamentals, such as improving employment and the income situation as well as high-level corporate profits, are supporting domestic demand. In this situation, it is necessary to continue to make steady efforts to achieve economic revitalization and fiscal consolidation in order to deal with our biggest issues: the declining birthrate and aging population.
 
　The consumption tax rate was hiked from 8% to 10% in October 2019. The hike is greatly important to ensuring stable fiscal resources needed to establish the social security system for all generations. In addition, while smoothly implementing the reduced tax rate system which was introduced to lessen the burden for low-income households, and ensuring smooth and proper consumption tax pass-on, we are taking all possible measures to level demand fluctuations in order to ensure continued economic revitalization.
 
　As for the budget for FY 2020, it is necessary to continuously undertake expenditure reforms under the New Plan to Advance Economic and Fiscal Revitalization in line with the Basic Policy on Economic and Fiscal Management and Reform 2019. We will promote expenditure reforms to attain the target of a primary balance surplus for central and local governments in FY2025, achieving economic revitalization and fiscal consolidation simultaneously.
 
　In October, Japan held the G20 Finance Ministers and Central Bank Governors’ Meeting in Washington D.C., which was the last meeting chaired by Japan in the role of the Presidency. During this year, as the G20 Presidency, we made strenuous efforts to maintain and strengthen the international economic order, which included reviewing the international taxation system (among others). Going forward, we will contribute to the sustainable, inclusive growth of the global economy.

 (Basic concepts of current financial sector policies)

　We will continuously strive to change the impression of the Financial Services Agency (FSA) from the Financial Sanction Agency to the Financial Nurturing Agency in line with FSA strategic priority 2019 with due consideration to various users.
 
　The acceleration of digitalization is making a great change to the financial sector. In the G20, we have been taking initiatives to tackle the issues associated with financial innovation, including crypto-assets.
We will continuously work on promoting financial innovation with due consideration to customer protection.
 
　As for assisting households in building stable assets and improving financial literacy, we will comprehensively promote initiatives including the diffusion of the “TSUMITATE NISA (Dollar-Cost Averaging NISA)” and implementation of financial education. This TSUMITATE NISA encourages households to enroll in long-term, installment, and diversified investments, starting with small amounts. We will also encourage financial institutions to take initiatives towards customer-oriented business conduct, and realize a virtuous circle of fund flows contributing to the asset building of households.
 
　With respect to our initiatives to maintain the long-term soundness of Japan’s financial system and to enhance financial intermediation amid the evolving financial environment, we will engage in in-depth dialogues with each level of personnel and external directors of financial institutions on the sharing of corporate visions across the company, implementation of business strategies and practice of governance. In addition, we will supervise inappropriate sales practices of insurance products by Japan Post Insurance Co., Ltd., from the perspective of customer protection.

(Bill to be submitted to the extraordinary Diet session)

　The bill which we will ask you to deliberate on, related to the Ministry of Finance, is the Amendment Bill of the Foreign Exchange and Foreign Trade Act. We will explain the details of the bill later.

(Conclusion)

　I am determined to continue, with your support, to do my best in policy management. I would appreciate the kind understanding and cooperation of Chairman Nakanishi and all the other members of the committee.

(End)