Press Conference by Taro Aso, Deputy Prime Minister, Minister of Finance, and Minister of State for Financial Services
(Friday, August 29, 2014, 11:19 am to 11:38 am)
Since the financial crisis occurred, the worldwide debate on financial regulation has progressed significantly, and to raise Japan’s presence in these international negotiations on finance, we are going to reorganize the Financial Services Agency (FSA). We are going to appoint a subcabinet-level Vice Minister for International Affairs within the FSA, so what was a Vice Commissioner post will become a Vice Minister post. On this day, the 29th, we appoint Masamichi Kono, who has rich experience and knowledge of regulation and supervision, and has chaired various international conferences as Vice Commissioner for International Affairs.
Questions and answers:
I have two questions. The first concerns Mr. Kono’s new post. Given that he is now a Vice Minister, will he be jointly attending international negotiations such as those of the G20, in other words, attending as the G20D, as deputy? At the moment, the deputy is the Vice Minister of Finance for International Affairs, but will Mr. Kono also be jointly attending?
I think he might do so depending on the circumstances. I don’t think he’ll be attending everything. Because a lot of different factors are involved, such as which fields Mr. Kono has expertise in. But basically the Vice Minister of Finance for International Affairs will remain the deputy. The Vice Minister of Finance for International Affairs, who is from the Ministry of Finance, will be attending.
So it’ll still be the Vice Minister of Finance for International Affairs at the G20?
The Vice Minister of Finance for International Affairs.
In its tax system amendment request, the FSA has asked that the tax-free threshold for NISAs be increased to 1.2 million yen. And with a tax-free threshold of 800,000 yen on children’s NISAs, the total will be 2 million yen. Minister, I think you mentioned in the past that you’d like the tax-free threshold to be increased from 1 million yen to 2.4 million yen, in other words, to 200,000 yen a month. Although it’s still at the request stage, I’d like to ask you if you think this will contribute to the so-called intergenerational transfer of income.
When talk of a one-million-yen threshold first emerged, personal financial assets amounted to 1,600 trillion yen, of which 860 trillion was in the form of cash or deposits. And while it’s not an overwhelmingly large proportion, 60-something percent of these assets are held by senior citizens. Those that would switch to an investment-focused approach would probably be quite flexible in their thinking, but when you ask whether ordinary people just see the scheme as just another new tax-free savings plan, you find that almost all of them do. For people like that, who want to put money aside month by month, 1 million yen divided by 12 works out as 80-something-thousand yen, which is a real pain. If people can put aside 100,000 yen, that’s what they will do, and if they can’t, they’ll put aside 50,000 yen. That’s why there’s been a considerable increase in the number of 600,000 yen accounts. So we suggested making it 100,000 yen a month, which is why we’ve requested 1.2 million yen this fiscal year. However, we’ve been considering a lot of different ideas, such as allowing people to set aside up to 15 million yen to cover their children’s or their grandchildren’s education expenses, but because the tax exemption scheme, which permits to 15 million yen gift per grandchild for his/her education from grandparents, was surprisingly well received and attracted money from a wide range of quarters last year, we decided to start by allowing people to put up to 800,000 yen in a children’s NISA, but if it doesn’t attract money, we’ll just scrap it. But if a surprising number of people take advantage of the scheme, and the children that receive the money become surprisingly interested in things like that, it won’t be a bad thing. There are a lot of female day traders, who around the world are referred to as “Mrs. Watanabe,” but not a single person in the Ministry of Finance imagined that the number of day traders would increase by as much as this. Since no interest is earned, people realize that with practice, money can invested at yield of 1% or 2%, and their mindsets might undergo a shift to think that that is actually pretty good. If that gets them started in investment, that would be good. If 800,000 yen gets a surprising number of such people started, then we can think about doing it again next year. This time, all we’ve done is suggest that we should start thinking about schemes for minors, for children ... there are a lot of expressions.
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