Koizumi Cabinet E-mail Magazine No. 151
(August 5, 2004 - August 19, 2004)
*Next issue will be delivered on August 26 (Japan Time).
[Lion Heart -- Message from Prime Minister Junichiro Koizumi]
Privatization of postal services: the heart of reforms
Just as the restoration activities for the damages caused by the torrential rains are continuing in Niigata, Fukushima and Fukui Prefectures, a typhoon struck the Shikoku region causing damages from heavy rains. I would like to offer my sincere condolences for those who lost their lives and my heartfelt words of encouragement to those who have had to evacuate their homes and are still taking shelter elsewhere while toiling away in restoration activities.
The local and cross-regional disaster rescue teams, as well as cross-regional police forces, and the Self-Defense Forces have unswervingly dedicated themselves to rescue and assistance activities, and emergency rehabilitation. As for our part, the central government too will do everything in its power to continue to take measures for assistance towards those afflicted by the disaster and the restoration of the damaged area.
Starting this week, the Council on Economic and Fiscal Policy will hold intensive deliberations to formulate a concrete plan on the heart of my reforms, the privatization of the three postal services.
The three postal services, comprising nationwide mailing service, savings and life insurance, as well as all postal offices located all around Japan, are convenient and an essential part of people's lives.
At present, 280,000 full-time and 120,000 part-time civil servants are working to provide these three postal services. Is it really a must, however, that the operations of mailing service, savings and life insurance be managed by civil servants?
Private corporations provide similar services: banks offer savings, insurance companies sell life insurance, and courier services do mailing.
They are constantly developing new products and services in order to succeed in the ever competitive market. In fact, delivery service for refrigerated goods and delivery at specified times were systems first instituted by private corporations, and later adopted by the public mailing service.
The privatization of the three postal services thus is at the heart of the reforms of "from the public sector to the private sector" advanced by the Koizumi Cabinet under the policy of "leave to the private sector what it can do."
Privatization does not mean an end to postal offices, let alone abolition of the postal services.
The three central postal offices in Tokyo, Osaka and Nagoya are all situated in prime locations, right in front of the central train station. It seems a pity for such a favorable location to only be used for providing postal services. Once privatization is complete, we will be able to use them more for a variety of purposes.
Ask yourselves whether the railroad services vanished after Japan National Railways was privatized, or what happened to the telephone services upon privatization of Nippon Telegraph and Telephone Public Corporation. It actually bettered the services. Therefore, there is no reason for concern that the three postal services will disappear once they are privatized.
The total amount of money accumulated from postal savings and postal life insurance comes to 350 trillion yen. In the past, these funds were used through the Fiscal Investment and Loan Program on projects implemented by the highway public corporations, the Government Housing Loan Corporation and other special public corporations.
The Koizumi Cabinet has rigorously reformed the special public corporations and most of them have been either abolished, privatized or restructured by integration into incorporated administrative agencies. The reform of the special public corporations is equivalent to the reform of the way in which money funded through the Fiscal Investment and Loan Program is used. The privatization of postal services is the reform of the flow of money at its source.
Last April, the government established Japan Post, a public corporation to provide postal services. Under the leadership of President Masaharu Ikuta, who came from a private sector background, Japan Post soon started the so-called "one-coin parcel" service, in which the cost of package delivery to anywhere in Japan is a flat rate of 500 yen. It also cut the cost of uniforms of the postal officers by more than half. I have heard many voices which attest to the fact that the services have improved.
Considering the finance, insurance, distribution and postal office networks that Japan Post possesses, I am sure that even better services will emerge once it is privatized. Although currently postal offices do not pay any tax, including corporate tax, once privatized, they will naturally pay taxes on their revenues.
No one opposes the principle of the reform of "from the public sector to the private sector." Once we get into concrete discussions, however, voices of opposition are raised. In particular, both the ruling and the opposition parties had thus far been against the privatization of the postal services. This was because the Liberal Democratic Party relied on support from heads of special postal offices while the opposition parties were supported by postal workers.
The privatization of the postal services is a reform being advanced despite all this opposition. The decision to privatize the postal services has already been taken; we are at the stage of discussing the details and not the general principle.
On Monday at the Prime Minister's Office, the Council on Economic and Fiscal Policy vigorously discussed the issue for two hours from six o'clock in the evening, and discussion will continue for now for another three hours in the evening after I return from Hiroshima tomorrow. There are many disparate opinions among the members of the Council and they frequently get into fierce debates. I hope for an outstanding concrete plan to be created with each council member giving his inputs to ensure that the quality of the service provided to the people is upheld and does not decline due to privatization, while paying due consideration to the treatment of the 280,000 employees.
A bill to privatize the postal services will be submitted to the regular Diet session next year and privatization will take place in April 2007.
As we are already into August, the sounds of the cicadas can be heard around my office. Unfortunately, the windows of my new office do not open, so I cannot listen to them from my office as I used to enjoy doing at this time of year in the old building.
From my room, I can see through the window the ongoing construction of the official residence and the garden. As I watch the soil of the garden being unearthed, I worry about whether the cicada nymphs in the ground are being left alone safely. I do hope so, as I am looking forward to listening to the cicadas next summer from the windows of the official residence.
With the all-Japan high school baseball championship tournament starting this week and the Athens 2004 Olympic Games next week, I conclude this week by wishing the best of luck to all the athletes.
* The title of this column "Lion Heart" is a reference to the Prime Minister's lion-like hairstyle and his unbending determination to advance structural reform.
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Assemblies (July 29, 2004)
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