04/29/2011 Recovery from disaster(funding/clean energy)

Pocket

(Chairman) Mr. Tanaka, please take the podium.
(Yasuo Tanaka) I’m Yasuo Tanaka. I represent a parliamentary coalition of the People’s New Party and New Party Nippon.
Japan is facing a national crisis in which its identity, the way we are, is now being called into question before anything else that matters. Dramatic change and strong determination are strongly called for. The effort requires a scale of conversion from the geocentric theory which the government in those days never doubted to the heliocentric theory. Today, through 24 minutes of my given question time, I’d like to delve into this, along with my colleagues, cabinet members and everyone else watching on TV or on-line, or listening to the radio in the disaster-stricken regions, so we can move to take action to make the change happen.
Some experts say we should now build massive walls against 30 meter high tsunami. But what struck us home when the quake hit was the cold, hard reality that we can be powerless, defenseless before the mother nature, despite all most-highly sophisticated use of our science and technology.
Needless to say, fishing port facilities must reconstructed, but as far as people’s homes are concerned, they will have to be moved to higher ground. Just like in Italy’s Liguria near Genoa, where terrains are rough and similar to the Sanriku ria coast, people should live on highland. We can reconstruct new villages on high ground from where people use cable cars to commute to their workplace. People can still virtually have workplace near their home because of the convenient transportation means. Then, they can continue fishing and provide rich marine resources to consumers across Japan. I believe, that is how we remember the disaster-victims and pray for their repose.
Three days ago, on April 26th, the government made a cabinet decision on a measure to improve land by removing salt from 20 thousand hectares of rice paddies that have turned into salt farm because of the tsunami. There’s no knowing yet when people there can move into temporary homes. There’s no knowing yet either, when they can overcome the invisible threat of radiation exposure. But despite that, a fund of 68.9 billion yen in the supplementary budget alone was appropriated to the project to improve the land.
I believe the government is wrong about priorities. Improving the self-sufficiency rate is a pressing issue, but the size of rice paddies in Japan is less than half of 1950’s. Plus, because of the rice acreage reduction policy, fallow or neglected, dilapidated rice fields are scattered around the country. I understand the desire to resume rice farming on the same land. But the land was hit by the massive Jogan Earthquake and tsunami eleven hundred years ago and will again be hit by another one sometime in the next hundred years, if not, within tens of years. I believe we need to improve inland idle farmland for local autonomies to reallocate land to help willing farmers harvest rice. That’s I believe a true initiative from the government.
The land which turned salt farm can be revived into a wetland, approved under the Ramsar Convention. There’s more. Researchers in Japan have found a new type of algae. It’s a heterotroph called “Aurantiochytrium” that can produce ten thousand tons of hydrocarbon in one hectare of land per year. Producing oil from algae is a fresh shift of energy resources and should be pursued and promoted as a national policy. I believe this is the measure for Japan to overcome this tragedy, because our country has been credited and won trust of the world with what’s called Monotsukuri-manufacturing, producing ‘the only one and the first one’ ahead of the rest of the world.
We need to breakaway from the equation of the 20th century which blindly believed in science and never doubted technology and to produce a new equation for the 21st century that makes use of science but go beyond the conventional technologies. Japan has fallen victim to earthquake and tsunami, but at the same time, it has become a victimizer, by endangering people in the world by radiation exposure. I’d like to present my points based on these facts.
I just talked about coming up with a new equation. But I do believe we need to hammer out a new equation in securing financial sources. There’s no country in the history of the world which succeeded in boosting its economy by tax increases. I repeatedly said that during my representative questioning as well as at budget committee meetings, on the half of the People’s New Party and New Party Nippon.
Unfortunately, some people are sponsoring tax hikes following the massive earthquake. They are like ‘a robber lecturing his victim against being robbed. I believe Mr. Kaoru Yosano is one of them. My colleague, Mr. Shizuka Kamei, gives Mr. Yosano high marks, but I think Mr. Yosano is very good at faithfully doing calculations based on the equation produced by the former and current Finance Ministries. But that generated massive debts of one-thousand trillion yen, which require us to create a new social common capital.
Since last year, we’ve been proposing the idea of creating a social common capital, based on the concept of a Big Society Bank, funded on unclaimed bank assets, which is championed by British Prime Minister David Cameron. Every year, some savings in bank accounts become dormant, unclaimed because banks lose contact with account holders for over dozens of years. Such savings become windfall profits to financial institutions, not on legal grounds but in accordance with the internal rules of the Japanese Bankers Association, under which depositors lose their rights to their savings. The amount of such savings reaches100 billion yen every year and I believe those savings should be transferred to the state to use to fund the new social common capital.
Some cabinet members have expressed support for the idea, but unfortunately it hasn’t gained greater support among the government as a whole. Our parliamentary group plans to sponsor it in a form of lawmaker- initiated legislation. We hope to obtain bipartisan support across as many lawmakers as possible including committee members.
There’s more. Since immediately after the massive earthquake, I have been promoting the issuance of 100 trillion yen worth of government bonds underwritten by the Bank of Japan. I’ve been proposing this through the electronic and print media. When the BOJ underwrites government bonds, the state pays interest to the central bank, but the interest will be reimbursed to the state as payment to national coffers. That means a new equation can be created without burden imposed on tax-payers.
One more thing. There’s what’s called, ‘interest-free, tax-free national bonds,’ or ‘no-interest national bonds.’ Mr. Tsuneo Watanabe, the chief-editor of Yomiuri Shinbun has repeatedly promoted this. I agree and believe these dormant savings kept under mattresses should be effectively utilized.
I’d like to have an opinion on this from Mr. Kan.
Mr. Noda, thank you for your proposals.Just to confirm the details you pointed out. You talked about interest-free, tax-free national bonds which will be exempt from inheritance tax. But the main purchasers of such bonds will likely be people whose lightened inheritance tax burden exceeds their lost interest revenues (because it’s interest-free) and it will likely worsen the state budget crisis. There’s an old example for this. In 1950’s, France issued national bonds to pay for war, under Premier Antoine Pinay. It was called Pinay Bond. I don’t think it proved successful. But since you presented us with data by various calculations, I’d also like to study these materials.
With regards to the idea of having the BOJ underwrite national bonds… Before and during world war two, the BOJ underwrote massive amount of public bonds and triggered a spike in inflation. The article 5 of the current Public Finance Act bans BOJ from underwriting public bonds in principle and stipulates that national bonds must be absorbed in the financial market. At president, national bonds are being issued and absorbed smoothly, even after the disaster and I think it still remains to be seen whether it’s necessary to issue such special national bonds underwritten by the BOJ. Cautious deliberations are needed.
(Yasuo Tanaka) Some say issuing too many national bonds can result in lowering their rating and raising the long term interest rate. But tax increases will not only slow down the economy in the disaster-hit regions but the nation’s economy as a whole. To make matters worse, because of the declining birthrate, Japan will bee a country with a population of only 90 million people in 20 years time. Labor population is dropping dramatically. I do believe a new equation is in need.
For instance, Japan has 80 trillion yen worth of US and other foreign bonds. I’m not saying Japan should be selling US national bonds. Some countries including China, for example, are using foreign bonds to play cards, as collaterals. Instead of selling foreign national bonds worth 80 trillion yen, Japan can use them as collateral when BOJ underwrites national debts. A masochistic view of history of Japan is causing concern that increased issuance of national bonds will spur pessimism in the national bond market. This way of thinking needs to be reversed.
Please take a look at this chart. I and my parliamentary colleague Mr. Mikio Shimoji, the secretary-general of the People’s New Party, have calculated the economic impact of interest-free national bonds to fund reconstruction projects, based on accounting research done by the Internal Affairs and Communications Ministry, annual data reports from the National Tax Agency as well as wage cyclical data from the Bank of Japan.
Household financial assets total 1,400 trillion yen. When debts are deducted from them, it’s 1,100 trillion yen. With insurance and pension reserves worth 420 trillion yen be deducted, it’s 696 trillion yen. About 53 percent of them is owned by people aged 70 or order, which is worth 369 trillion yen.
Don’t get me wrong. I’m not saying we’ll rob the elderly people of their assets. Assets owned by the elderly people will in the end be taxed when given as gift while the person is alive or posthumously as inheritance
It will be a temporary statue with a 3 year lifespan, exempting gifts while the person is still alive from taxation. Assets worth 184 trillion yen out of 369 trillion yen will be handed over to recipients in their 40’s and 50’s as donated property. The propensity to consumption of those people in these age brackets is about 70 percent.  Then, 129 trillion yen (out of the 184 trillion yen) will be spent by the recipients in 10 years, which will push up GDP. When multiplied by the tax revenue elasticity of 1.1, the amount will be 11.6 trillion yen.
The remaining half of those assets given as gifts while people are alive, which are worth 184 trillion yen, will be spent on purchasing interest-free national bonds to fund reconstruction projects to be issued this time. The money will all go to national coffers and can be spent on public investment. The government will begin spending more and the economy will grow. If we calculate the increase, using the same value of elasticity, the total revenue increase will be 16.5 trillion yen in 10 years.
Tax revenues from inheritance and gift taxes are worth annual 1.2 trillion yen including those from land and property. As stated in the chart, with all generations combined, they are worth 4.5 trillion yen. If the temporary statue with a 3 year lifespan takes effect, the figure will be 184 trillion yen, enabling the state to issue an annual 61 trillion yen worth of national bonds.
Some people are saying, how can that be repaid in the future? But faced with the unprecedented national crisis, Japan needs to create a new equation. We need to breakaway from the conventional of setting a short-term debt ceiling. The government needs to present the way we are, or ought-to-be as a nation.
Incidentally, during the Pacific War and World War Two, 70 percent of Japanese who were at the warfront died not as a result of fighting but of malnutrition. That means part of the tragedy was attributable to logistics failures.
The same thing can be said about the March disaster. I’ve known Mr. Katsunobu Sakurai, the mayor of Minami-Soma city, since I became governor. We visited the city four times since the disaster to extend support for quake-victims staying in shelters. We provided hot meals and other necessities. I heard from the mayor about the situation.
As you know, in the wake of the disaster, people in the city were told by the government to ‘stay in doors.’ They were also told to be self-sufficient, meaning they were told to get the food they need by themselves. But because of false rumors circulating at the time, no truck carrying supplies was arriving in the city. The residents were virtually abandoned just as Japanese solders were left abandoned in Iwojima during the Pacific War.
I’ve proposed this before and I propose it now that the government communicate with the public through NHK Radio Daini or other public broadcasting services to issue necessary instructions in the event of emergencies based on the laws. Information on hospital and other lifelines can be aired on prefectural basis, for example, in Fukushima, Miyagi, Iwate prefectures for the first crucial 3 days around the clock. Ibaraki Prefecture has a commercial broadcaster called Ibaraki Broadcasting System. The state can invest human and financial resources and provide crucial information to the public. I think it holds a key to bringing calm and a sense of security to the people in the disaster zone.
There’s more we could and could have done. We heard about a law banning Self Defense Force helicopters from dumping relief goods from the skies. But the first response, the first three days of the disaster are crucial. Helicopters can fly low over villages, dumping packages containing wind-up radios, blankets, water and food, even if no person can be confirmed in the area.It’s regrettable and also to my regret, we need to urgently improve the logistics.
Kyodo News reported that instead of evacuation orders, the Japanese government issued requests for voluntary evacuation to avoid paying the cost. It quoted a comment from a government official, saying if orders were issued, the government would have to pay for the costs and that would have been costly. Japanese people deserve a better government, do they not?
People need to be fed, clothed and housed. I personally felt it firsthand when I volunteered to help as a citizen after the great Hanshin-Awaji Earthquake. The first things people need are food, clothing and shelters to protect them from the cold and hunger. But I honestly believe people need to have a desire to live. And people can only have the desire to live if their workplace and housing are secured.
When the great earthquake hit Hanshin-Awaji, a worker at a chemical rubber plant in Nagata ward not only lost home but he lost employment. But many others had employment in Himeji or Osaka. But in the Eastern Japan Earthquake, people not only lost loved-ones and their homes, but they lost employment and the companies they worked at.
For now, temporary homes are built by each municipality. But as I confirmed once again yesterday, Kesennuma is located in Iwate Prefecture. But Ichinoseki, only 10 minutes away at the end of a tunnel, had electricity and lights on even on the day the earthquake hit. And there are fallow farmlands in the area. Shelters can be built by small units, not only in the hundreds, but for ten or fifteen groups of families. Minami-Sanriku town and Tome city in the same Miyagi Prefecture, located at the end of the tunnel, had electricity restored immediately. The region too has fallow farmland and other land.
I do believe state involvement is essential, not by way of coercion but by presenting appropriate guidelines on logistics. Then, the state can seek cooperation from people who know well about the situation at each respective community. I sincerely hope the heads of the related ministries and agencies will take this matter seriously.
(Chairman) Mr. Tanaka, wouldn’t you like to have the prime minister and other ministers to respond to your questions?
(Yasuo Tanaka) No, that’s fine. I have one more thing to propose. That is….
(Chairman) But Mr. Tanaka, you won’t have time for them to respond. Is it still fine?
(Yasuo Tanaka) Yes, I understood.
One more think I wish to reiterate is the idea of Basic Income. Some people who were forced to evacuate because of the nuclear crisis have received one million yen per household. But many others in the disaster-hit regions have yet to receive any of such payment of support. Basic Income is for everyone. If the state starts paying 100 thousand yen per person every month, people in Kesennuma, for example, can purchase fishing nets and start fishing again. Or they can move to somewhere else. I call it ‘preparation funds.’
To avoid misunderstanding, I should note that even day laborers in Sanya or Airin would have to pay 60 thousand yen per month, if they stayed at an inn which costs 20 thousand yen per night. Instead, they should rent a room for 30 thousand yen, rather than paying 60 thousand yen per month. But since they do not have a guarantor or cannot pay a security deposit, they are unable move out of Sanya or Airin.
I’d like the government not only to build temporary housing but introduce Basic Income, so every single person in this country can spontaneously move out from the shelter, rather than being forced out.
I also have a question for Mr. Kan to answer. With regards to what’s called clean energy, Mr. Kan told a budget committee on March 29 he wants to lead the world in developing clean energy sources such as solar and bio-energies which will be the major pillars of Japan’s energy policy for the future. I’d like to ask Mr. Kan if he includes nuclear power generation in what he calls clean energy.
(Chairman) Disaster Management Minister Ryu Matsumoto, please take the podium to respond on the issues of logistics and temporary housing.
(Ryu Matsumoto) I’d like to respond to a question regarding logistics.I was at the government’s Crisis Management Center soon after the March earthquake hit and heard the tsunami came. As Mr. Tanaka pointed out just a while ago, information about tsunami was the most crucial. So I immediately ordered the delivery of portable radios to the disaster-hit regions. There was no electricity, no gas nor water supply. I was aware of the importance of sending information on tsunami and aftershocks and I issued the orders.
As for relief supplies, as Mr. Tanaka pointed out about SDF helicopters…. Unfortunately, the roads were badly damaged and so were coastlines. Most fuel stations and ports were also devastated, so were service stations with fuel reserves. I believe the issue of fuel supply needs to be dealt with. We will review shortcomings and continue making efforts.
(Chairman) Land, Infrastructure and Transport Minister Akihiro Ohata, please take the podium to respond on the issue of temporary housing.
(Akihiro Ohata) We have been racking our brain, trying to secure locations for temporary housing. We’ve been seeking ideas from various people and trying to find places least likely to suffer damage when another earthquake and tsunami of the similar scale hit in the future. We will continue welcoming ideas, while trying to the best of our abilities to secure places for temporary housing.
(Chairman) How about lump-sum payment for people who were forced to evacuate because of the nuclear accident?
(Yasuo Tanaka) Mr. Chairman, that’s fine. Introduction of Basic Income is my proposal. I want an answer for clean energy.
(Chairman) Understood. Then, Prime Minister Naoto Kan.
(Naoto Kan) There are various opinions when it comes to clean energy. I think I meant clean energies which include solar, wind power, bio-energy and hydrogen energy when I discussed that. I didn’t mean to include so-called fusel fuel or nuclear power generation at the time.
(Yasuo Tanaka) That’s very encouraging. Since Japan has become the victimizer of the world, I agree it’s an honorable thing, an honorable public works project, figuring out ways to decommission the existing nuclear reactors, spending how many years.
Wind power is one thing. But back in 1970’s, Japan was leading the world in terms of technologies and marketability in solar batteries and sunlight. But unfortunately, the effort failed to become a national policy and Japan fell behind Germany or China. I think enacting a law requiring the installment of solar panels on all new and remodeled structures can send a message to the rest of the world.“Aurantiochytrium” I talked about a while ago are a type of algae, discovered by Professor Makoto Watanabe at the University of Tsukuba last year.
These algae can produce hydrocarbon very effectively. It can produce 10 thousand tons of hydrocarbon per year per one hectare of land. So a land of 20 thousand hectares is sufficient to cover annual oil consumption in Japan. By coincidence, the salt farm whose land improvement I earlier talked about is exactly the size, 20 thousand hectares.
I earlier also talked about reviving the salt farm into wetland to be approved under the Ramsar Convention. What I meant is producing this type of algae in this wetland. In the US, a major oil producer heard about this and has already begun investing in that research. I think it’s worthwhile for Japan, known as being ‘the only one’ and ‘the first one,’ to start working on the project. When I talk about Basic Income, it’s for everyone. I’m saying the government should make payment every month until people can stand on their own. The government is currently thinking about paying by household a certain amount, depending on whether their home is damaged or destroyed. But people whose homes were damaged are also suffering. On the other hand, the government is saying it will pay 2.5 to 5 million yen to the deceased. Of course it’s important. But we need to support survivors who need to continue surviving from now on. The government also faced criticism on the issue of child benefits. But I believe we should make payment not by household, but by individual, because the patterns of families and employment are diversifying. I think if the government does this now, it will be remembered as setting a precedent.
On the issue of clean energy resources, the March earthquake hit 2:46 p.m.. The great Hanshin Awaji earthquake occurred 5:46 a.m. when, unless working a night shift, people were home with their families. So some families said they were all safe, or their son was buried under rubble. But still they were willing to go out and rescue an elderly woman across the street who lived along and had difficulty walking. We witnessed the strong bonding of communities and families.
In the March earthquake which hit 2:46 p.m., the strong bonding of communities and families was also evident in areas where people lived and worked close. Japan has quite a bit of records in archives dating back to early Heian Era about 11 hundred years ago. It’s the bonding of our communities in our history the US can never look back to.
The same can be said about the communities hit by the March earthquake. They had police stations, fire brigades and post offices. It wasn’t the line of control under a pyramid society, but the horizontal bonding of the communities which mattered. Because of strenuous efforts made by these people, survivors joined forces in helping one another.
I sincerely hope Japan will use such wisdom and Mr. Kan will make best of his intuition and insight, conceptual and creative powers as well as abilities to decide and act, so he can work together with all the others to make Japan be a ‘nation we can trust.’ All the bills, budget appropriations and other activities should be there to achieve the goal. I hereby conclude my questioning.
(Chairman) Thank you, Mr. Tanaka.