Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister for Financial Services
(Tuesday, July 1, 2014, 10:48 am to 11:03 am)
[Questions and answers]
Minister Amari has said that the tax-free threshold for NISAs could be increased from the current one million yen per year to, for example, two million yen. In addition, some news organizations reported this morning that lowering the minimum age for the accounts from 20 to 18 years old was being considered. Minister, please tell us your views on this.
The key thing is that at present 850-860 trillion yen in personal financial assets is lying dormant in the form of cash or deposits. In addition to the so-called tansu-yokin (cash stashed away at home), these cash and deposits are dormant. Corporations also hold cash and deposits, and the most important thing for the economy is that these cash and deposits be directed into investment. NISAs are one means of achieving this. I think that Japan’s cash and deposits, including those held by corporations, amount to more than 1,000 trillion yen, so suppose, for example, that around ten percent of these cash and deposits, or 100 trillion yen, were directed into investment. Instead of earning interest of just 0.6% or something, suppose they instead earned a return of ten percent this year. Ten percent of 100 trillion yen, or ten trillion yen, would be two percent of GDP, so finding ways of directing cash and deposits into investment is incredibly important. NISAs are one of those ways. You mentioned an increase from one million yen to two million yen, but a lot of people don’t understand the system too well because they haven’t actually used it themselves. A lot of people open a NISA with the view that they’re going to pay in 100,000 yen each month, like they would with an automatic savings plan. They think it’s that kind of scheme. So they start by paying in 100,000 yen per month, which is 1.2 million yen per year. Later they might want to pay in 200,000 yen per month, which is 2.4 million yen per year. So we should structure it like that. One million yen divided by 12 works out at just over 80,000 yen per month. Doing division like that is a hassle, which I think might be the reason that a huge number of accounts are for 50,000 yen per month, which is 600,000 yen per year. So I think that next we should be thinking in terms of 2.4 million yen per year, for example. That would more closely reflect the realities.
What about reducing the age of eligibility from 20 to 18?
We’re not actually thinking of doing that at the moment. There has been talk of reducing the voting age to 18, of amending the National Referendum Act, for example. There has been a lot of talk. A lot of laws would be affected by that, including all those relating to civil law, and personally I think that changing the age to 18, which is one of the proposals, is not a bad idea. That’s college-student age, and some 18-year-olds have graduated from high school and started working. When you consider those people, I don’t think it’s a bad idea at all. Having said that, if other laws, the Criminal Code, the Code of Criminal Procedure, the Civil Code, all use the age of 18, because they are all related, 18-year-olds would be able to enter pachinko parlors, smoke cigarettes, and drink alcohol, for example. So because everything is related, I think we have to make the decision after seeing whether the adult ages in the laws administered by each ministry are all going to be changed to 18.
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