A lecture on FCCJ by Yasuo Tanaka

Pocket

Good afternoon, ladies and gentlemen,

I would like first to express my gratitude to the established Foreign Correspondents Club of Japan for once again giving me an opportunity to speak before you for the fifth time. I was 25 years old when you invited me for the first time 16 years ago.

You have with you a brochure which says ‘New Japan Declaration 2007,’ in which details of our ideas for the upcoming Upper House election are written. We chose not to use a word ‘Manifesto,’ and instead we call it a declaration. The English version of our New Japan Declaration…”Whatever is wrong, let’s make it right. A mission, a decent society.” my personal history as well as past speeches at FCCJ, ‘No-more-dam declaration,’ ‘Departure from the press club’ and other declarations in English are accessible at URL.

New Party Nippon was inaugurated 2 years ago, when I was still Nagano governor. In fact, the party was established only 2 weeks BEFORE then the general election, and fielded candidates in 5 out of 11 election blocks, the number of votes we won levels that of the Social Democratic Party, which garnered 330 thousand votes per one election block. New Party Nippon garnered 320 thousand votes.

In the upcoming upper house election, I, Yasuo Tanaka, the party leader, and Yoshifu Arita, the deputy party leader will be running under the proportional representation system. Arita is 55 years old, 4 years senior to me. Arita, who was once was a magazine editor, received a good reputation as a free lance journalist investigation a dubious, manipulative sales scheme involving the Unification Church.
As he took on a probe into the 1995 Tokyo subway sarin gas attack committed by the Aum Shinrikyo religious cult, Arita began appearing on television first as a commentator of the Wide of Nippon Television Network(NTV). He has also been active in pursuing the North Korean abduction issue. In 2002, he campaigned for launching an opinion ad on the New York Times, calling on action to resolve the abduction issue.

Just as I rushed to help quake victims at shelters and tent villages, riding on a 50 cc motorbike during the Great Hanshin Earthquake, Arita, not only spoke on television and in print, but took action in problem-solving. Both he and I had pursued French philosopher Jean-Paul Sartre’s notion of “engagement.”

As you probably all know, last Thursday (on July 5th), upper house diet member Hiroyuki Arai, who served as our party secretary-general and Minoru Taki, lower house diet member who served as general affairs chairman, sought disbanding of New Party Nippon. But I have to make it clear. Two years ago in the general election, Taki failed to win in the election, having only garnered 29 thousand votes in Nara number 2 district, running under the single seat constituency system. But because over 420 thousand voters in the Kinki block voted for New Party Japan under the proportional representation system, Taki was resurrected, or revived, as a zombie. And calling for the disbanding of public party New Party Nippon, which enabled him to become a diet member, is tantamount to ‘blasphemy’ to voters.

Incidentally, this week edition of Shukan Bunshun is reporting that Arai is desperately seeking to become the White Knight, or the savior for the ruling Liberal Democratic Party expected to lose the majority in the election. On the other hand, under the public office election law, Taki will not be allowed to join another political party, unless New Party Nippon is disbanded. The pair may have their own agenda. Who knows. I did not allow the party to be disbanded. They left the party and become independent.

When I have to define the upcoming election, I would define it as calls to rid constraints, rid collusion. Renewed New Party Nippon will be a party of no fetters, no back-scratching, with Tanaka and Arita leading a new team.

Polls show over 50 percent of eligible voters have no specified party affiliation, or party to support, while nearly 80 percent of them have no hopes for the future politics. But even those despondent voters aren’t willing to allow Japan to remain as is, a nation in disguise, or a society of bid-rigging. If that is the case, as we wrote in the very beginning of New Japan Declaration, we should breaking away from a mindset buried in past successes, we must take steps towards a political system that offers hope to people who are earnestly working, studying, and living in this country.

Five thousand cases of pension in limbo. Nursing care business fiasco involving Comsn-Goodwill…Beef false labeling by Katokichi-Meat Hope…just naming a few. Irresponsible education, irresponsible diplomacy, irresponsible appointment of cabinet posts by prime minister Shinzo Abe, resulting in scandals after scandals…Japan is turning to be a nation of deception, a flawed nation. What the government is doing is the opposite of a team spirit working and competing to resolving problems. Eliminating outsiders and colluding among buddies and back-scratching relations of never solving problems and postponing them all the time… that’s an insular Japan we are in today. Those what they call past successes are already experience of failure in the past.

New Japan Declaration consists of the following 4 ideas.
1. Introduction of pension passbooks allowing for quick verification of past premium payments and future benefits.
2. To prevent a slowdown in consumption and economic growth, fiscal reconstruction without tax increases is needed
3. Break away from a construction-obsessed government and utilize what we have
4. Improved food self-sufficiency to protect our children and attain “life security”

These are different from other party’s pledges. The four ideas link to one another closely. They are all part of a story of challenging to change the mindset, to make different choices and revising the system itself, to make Japan a better nation.

On the pension fiasco, there will be no problem solving unless the pension system itself is reformed. The point is not reforming the social insurance agency. New Party Nippon has always been calling for the introduction of the pension passbook system for the past 2 years. At present, pension handbooks consist of only the date of enrollment, so people would not possibly know when they can start receiving benefits and how much. The pension passbooks we are proposing will state monthly premium payments and future monthly benefits that one is guaranteed to receive at retirement, It will bind the government and people through a contract of trust.

During a televised party presidential debate on Sunday, the opposition DPJ leader Ichiro Ozawa also spoke of the need to introduce pension passbooks. But the government and other political parties are blurring the issue by using abstract terms such as “estimates,” with no guarantees.

The pension passbook we, New Party Nippon, are proposing is our original. It will state monthly premium payments and future monthly benefits that one is guaranteed to receive at retirement, including additional benefits paid from the state treasury at the end of the fiscal year, which will be calculated at a rate of 1.7 times.

Why does it have to be so specific and in details? Because many people are skeptical about the inconsistent, flip-flopping government policy on pension.
Seven years ago, the government pledged to reform ‘100 year pension safety,’ promising to pay out 60 percent of a retiree’s after-tax earnings. However, only 4 years later, this target was further reduced to 50 percent. With this uncertainty, how will the unpaid premium rate already exceeding 30 percent can ever be reduced?

It’s not the benefit estimates people need. It’s the introduction of pension passbooks verifying the amount of future benefits at the end of each fiscal year that we are proposing. The book lists the pension fund balance as totaling 150 trillion yen. But how much is actually left intact? The government has no intention or whatsoever to reveal that. And the passbook system we are proposing will serve as catalyst in holding the government accountable and pressuring it to disclose the figures,

We should also not forget the fact that the 59 trillion yen pension fund has been injected into special public corporations including former Japan Railway and former Public Highway Corporation and most of the fund has become irrecoverable. Unless the structure of runaway money drain, so-called Zaito, treasury investment, is drastically transformed, the problem will not be solved, but simply postponed.

Of course, it’s urgent to verify the 5 thousand pension records unaccounted for. But identifying stops short of solving the entire problem. It’s just an emergency paving work to fill up 5 thousand gaps or cave-ins on pension roads. The truth is underneath the pension roads, the underground is liquefying. The pension system as a whole has to be reconstructed in a drastic way.

Despite all the problems, the Article 74 of the National Pension Law of the Social Insurance Agency Reform law craftily states that a portion of pension reserves can be used to fund pension education, public relations and consulting activities. Crafting into the bill phrases like ‘related’ and ‘etcetera,” and stretching further the interpretations to allow for wasteful spending is a typical tactic of bureaucratic politics.

The government may set up a luxry pension tea lounge outside the Kyoto Station, serving tea to the elderly free of charge and providing free tours to the youth in the name of education and public relations activities to reduce unpaid pension premiums. The present government is a group coming up with projects packed with jokes and draining taxes and reserves unscrupulously.

Even if the signboard of the Social Insurance Agency is replaced by that of the “Japan Pension Organization”, bureaucrats won’t lose anything but get richer. They say making public servants non-public, but the truth is their salaries will be paid by taxes. We did a research on this when I was governor, serving as the chairman of the Association of prefectural governors, the employees at special administrative corporations are set an average 10 percent higher than those of public servants.

What makes it worse is that the revised law which calls for the renaming of the Japan Pension Organization states nothing about internal control or auditing methods. Just the rhetoric of dismantling or abolition is dancing around and it’s simply the replacing of signboards. Bureaucracy will live in security.

The 6 years of my governorship were spent on battling these bureaucratic organizations. In that sense, public servant system reform for whose passage the prime minister extended the diet session in itself is a false advertising. The government officials’ golden parachuting which had long been arranged in the ministry and agency level will be unified and arranged by the government. That’s what the current law revision is all about. In short, it’s the legalization of public golden parachuting. And there’s more.

Before the revision is made, there had been a set cooling off period for a job transfer, meaning between retiring from a government agency and landing a new job. So immediate parachuting wasn’t possible.
However, with the revision of the law, parachuting into universities or research institutes that have been made into independent administrative public corporations has been made possible immediately after retirement. There sill be a countless number of not only professorial posts but trustee posts at those universities and institutes. For example, officials from the Land, Infrastructure and Transport Ministry, the Agriculture, Forestry and Fishery Ministry and the Health, Labor and Welfare Ministry will find post-retirement jobs at universities’ engineering, agriculture and pharmacy departments as trustees. And that’s not all. They will later have another chance of golden parachuting into construction companies, agricultural organizations and pharmaceutical companies. And all this will be legal by the law.

So called ‘the public and private human resources center’ which in fact is the legitimatized golden parachuting agency is not in charge or, in control of second time parachuting from independent administrative public corporations to private enterprises. It’s virtual human laundering as opposed to money laundering.

Every year, Japan is losing 800 thousand people, equivalent to residents in in Tokyo’s Setagaya Ward. In 25 years, one out of three people in Japan will be 65 years old and over. We need to .move from quantitative expansion to qualitative fulfillment and through the course, yields have to be improved. This sort of a dramatic change in the mindset is called for. Making excuses by saying ‘You can’t do it because there’s no precedent’ can’t be tolerated. We need to tear down the walls of bureaucracy. We need to say No to what’s wrong. Whatever is wrong, we need to make it right.

Please take a look at our party logo. New Party Nippon logo. On the right shoulder of the rising sun with a message saying, ‘Change your view, Re-examine Japan,’ there’s another tiny rising sun. The history shows a good apple can be spoilt in a rotten barrel. What I’m trying to say is a small party with a resolve tends to end up playing up to the big. So it’s important to have our own view and philosophy and to make objective judgment on societal matters. The idea has a dialectic implication. At the same time, it’s a dire warning against the Japanese government incapable of dealing with problems logically, as is evident in the pension problem.

Just taking an example of Nagano prefecture…during 41 and a half years before I became governor in 2000, there were only two governors. Both of them were former public servants. During that time period, no budget requests, personal appointment or ordinance had been voted down or modified, even not once. But this happy-friendly back-scratching club with plenty of oppressive fetters whose members are the governor, the employees and assembly members was constantly producing a financial state, ranked the worse second in Japan.

With other prefectures incurring increased debts, Nagano was the only prefecture to reduce its outstanding debts for 6 consecutive years by a total of 92.3 billion yen and achieved primary surpluses for 7 straight years since I took office. In the final year of my governorship, the fund balance even increased.

Unless we retool our mindset and choices based on our current reality, and restructure the existing system, we will be unable to overcome the challenges of a rapidly declining and aging society. The simplistic and bureaucratic approach of responding to budget reductions by decreasing the size and number of projects must be replaced with the more corporate approach of cutting costs while maintaining those projects. Four years ago, Yasuo Tanaka, known as the “Anti-Bid-Rigging Governor”, implemented an open and transparent competitive tendering system in various fields.

The unprecedented move made it possible for local companies, which were previously sub-subcontractors of major corporations, to participate directly in public tenders. This resulted in pushing down the average successful bidding rate of over 97 percent before I took office, which was clear evidence of bid rigging, to the lowest nationwide of less than 80 percent. By eliminating discretionary contracts and selective tendering, which was the breeding ground for rigged bids, the cost of one project was cut from 1 million yen to 800,000 yen, allowing us to stop the opaque flow of tax funds.

The cost savings of 20 to 25 percent from these public tenders were then redirected to welfare, medical, educational, environmental and tourism industries that benefit the public and help create community-based jobs, as is vital in the 21st century. Nagano was the first nationwide to introduce elementary school classes limited to 30 students. This was made possible as we secured independent revenue sources by implementing fiscal and bidding reforms.

Public office spending called the government final consumption expenditures was 9 percent of the GDP 19 years ago in 1984. The figure doubled to 18 percent in 2005. If only a half of the increase, that’s 4 and a half percent, is saved, that’s 23 trillion yen in savings. Then, 14 trillion yen in revenues necessary to cover basic pension by government coffers can be secured and there will even be a surplus.

But such reform has never been implemented, because the effort is certain to threaten vested interests held by bureaucrats. So a true political leadership is strongly been called for. Reduction by 50 percent in expenditure increases…meaning 25 percent cuts in public office expenditures as a whole is tantamount to what we achieved in Nagano by implementing an open and transparent competitive tendering system, resulting in the lowering of the average successful bidding rate down to 75 percent. So, it’ s feasible and fully achievable.

Here is a photo of the Shinshu-style “wooden guardrails” set up in Karuizawa. It’s an example of community-based cyclical projects.
There are only five companies producing steel guardrails across Japan. All of them are based in Tokyo. As is the case with mega public works projects represented by dam construction whose project cost flow largely to general contractors in major cities, over 90 percent of project cost goes to major cities. What makes it worse, no government subsidies are allotted for installing guardrails.

As we increased the budget for preservation of forestry which covers 80 percent of the prefectural land by 250 percent, we came up with the idea of developing strong and durable wooden guardrails using thinned wood. We invited local civil engineering contractors and three group companies responded. Collision tests using a heavy truck at a testing ground in Tsukuba city were carried out and the products passed the state-sponsored durability tests.
The guardrails have the strength of steel but have warmth because it’s made of wood. Logging, lumbering, manufacturing and installation of our self-developed “wooden guardrails” were all done by local companies. The project boosted local employment by 5 times while maintaining the same project cost.

Why does the government continue spending on new public facilities? The reason is that government-issued bonds can only be used to fund the 3 areas of roads, buildings and parks.

Arrests were made and suicides were committed in a fiasco involving the Japan Green Resources Agency. In contrast to its name, the agency has deforested mountain slopes and destroyed the environment to build roads. The Forest Ministry actually spends less than 3% of its budget on forestry development, with the remainder going to public works that put cement walls and steel piles into mountains. Such structure has to change.

The same situation prevails with public day care services for the elderly, with the government providing generous aid only for the construction of new facilities. This is why new buildings crop up in the middle of paddy fields far from villages, unsuitable with the natural landscape.

In Japan, even welfare is a target for a government obsessed with public works projects, which is why national debt continues to rise at an alarming rate of 6.6 billion yen every hour to 1,000 trillion yen now. In the 5 years since 2001, when former prime minister Jun-ichiro Koizumi called for structural reform, national debt actually increased by one quarter to 250 trillion yen.

The population of Japan is about 10,000 times that of Yubari City. Multiply Yubari City’s debt by 10,000 times and the figure is equal to the national debt. The financial collapse of Yubari city is not a story limited to sparsely-populated autonomies, but mirrors the country as a whole.

Income earned by salaried workers continue declining for 8 consecutive years, while tax burden on them have increased by 3 point 9 trillion yen.
Last month, flat tax cuts were repealed, adding a burden of 3 point 2 trillion yen, which amounts to a 2 percent hike in consumption tax. That is certain to result in a deflational spiral, leading to the slowing of consumption and the economy itself. Without fiscal reconstruction without tax increases, young people with Japanese passports will be leaving to Canada or Australia. Japan will be more graying and its population will be shrinking rapidly with low birthrate. Change in the mindset and views is urgent.

The outcome of fiscal reconstruction and tender system reform I’ve just laid out presents evidence that fiscal reconstruction without a reliance on tax increases is fully achievable.

And yet, bureaucrats in Kasumigaseki are adamantly resisting. Let me explain how silly that is, by giving you the details.
First, I will take an example of the significance of No-more dam declaration, which prompted conservatives at the prefectural assembly to level a no confidence motion against me.

When I became governor in October, 2000, Nagano prefecture was on the verge of financial collapse and had 9 planned dam construction projects in the making. Despite of the fact that nearly 70 percent of area residents were opposed to the plans, conservatives at the prefectural assembly were adamant, saying mega public works projects would stimulate and enrich the local economy.

Our investigative research has unraveled the fact that 72 point 5 percent of the total project costs was shouldered by the government, but 80 percent of it had been paid to general contractors outside the prefecture. That’s in short is a money drain or outflux of it, outsourcing to other prefectures. So, local community-based contractors, which had to reconcile working as sub-subcontractors were in dire financial state. Then it’s much better if we can create jobs in the local communities with flood control, bank protection and forestry preservation at much lower cost

The area of rice paddy fields to which water is drawn from the rivers is on the decline, almost been halved that in 1950’s. To anyone’s surprise, the land, infrastructure and transport ministry and the agriculture, forestry and fisheries ministry have never reviewed irrigation rights for the first time ever in one-hundred and eleven years since 1986. They have no intention of reviewing irrigation rights that are dormant. There’s no doubt they would not want to do it in order to keep constructing dams forever and more.

The article 33 of the urban development and planning law bans building homes on land prone to landslides. However, the article 29 of the same law says the ban will not be applied when it comes to developing social welfare or medical facilities. In this country, luxury hospitals and nursing homes are being built one after another on desolate land, far from human habitation, but owned by agricultural cooperatives or construction companies.

More and more mega-sized special nursing care facilities are being built, while few group homes for the elderly close to town are seldom built. As you can see, the number of community-based employment at special nursing homes where one caregivers take care of 6 people is double that of group homes where 2 caregivers take care of 6 people. The construction cost of group homes per bed is one-third. With the same care given, the monthly care fees at special nursing homes are 320 thousand yen while those of group homes are 230 thousand yen. 90 thousand yen is a big difference. Don’t we think it’s much better to have group homes nearby than special homes far away, with the difference in cost.

During my tenure, shopping districts and vacant homes in villages were refurbished to provide joint daycare services for both the elderly and children aged up to 3 years old, with 300 such facilities set up in elementary school districts.
Having children close by, the elder people apparently gain strength from them, while in turn, children can learn wisdom from the elderly. It’s welfare by community inclusion and not by generational divide.
The government provides generous aid only for the construction of new facilities. This is why new buildings crop up in the middle of paddy fields far from villages, unsuitable with the natural landscape.

In Japan, even welfare is a target for a government obsessed with public works projects, which is why national debt continues to rise at an alarming rate of 6.6 billion yen every hour to 1,000 trillion yen now.

Critic Soichiro Tawara once told me. Governors who chose to become a part of the interest-pie-sharing pyramid scheme, which had been built over a long time by collusion among politicians, bureaucrats and businessmen, are on velvet, meaning they could live in security, happily ever-after. And governors who attempted to build thier own pyramids together with industry newcomers have been busted, after tips from jealous whistle-blowers with vested interests.
And you, Mr. Tanaka, you have rid the prefecture of collusion and never established special interests, and in the end were booted out ALL because of that.
Well…he may be right.

The Chinese character meaning I in Japanese consists of two small characters. The left means ‘grains’, while the right means elbowing someone out of the way. The primary meaning of the character is We are not going to share grains with villagers in the neighborhood.
On the other hand, the Chinese character meaning Public in Japanese means blanketing the egoism (of elbowing) and embracing the awareness to the level of serving in communities.

I’ve always been saying, what’s in need is not a transfer from bureaucracy to ‘me-ism’ but from the bureaucracy to the public, and from the private to the public. Engagement, tolerance, generosity….is what I believe is the most important.

Celebrities running in the election with party endorsements are calling on voters to vote for them because they are celebrities. They are demanding blank power of attorney, saying, ‘Because I am famous, I deserve your vote, so write my name on a ballot.’

New Party Nippon is different. Yasuo Tanaka and Yoshifu Arita are not men of lip service who make statements from a safety zone. We are always friends of little people without backings. We are men of actions, we have a trusted record of producing concrete results.

We are running in the election, hoping voters will cast their votes in hopes for the future , making valid assessment on our past records and visions for the future. News Volume one we’ve handed to you talks about New Party Nippon visiting Yubari city for the first time, and News Volume two talks about what we did in expressing concern earlier than anyone else, over the proposed relocation of the Tsukiji fish market.

New Party Nippon, totally free of constraints, ball and chain, will be like you, highly-respected journalists. We will expose what is wrong, and work together to make a change and make it right. We will be a catalyst to make that happen.
In fact, this collusion-prone nation in disguise will be tested in the upcoming election. The nation’s ability to breakaway from constraints and collusion will be called into question.
We, New Party Nippon, are determined to do BEST for Japan, by taking steps towards creating a political system that offers hope to people who are earnestly working, studying and living in this country.