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Fundamental Reform of the Fiscal Investment and Loan Program (FILP) |
1. Background and Future Schedule
| (1) | Major events |
| -- | The basic direction of the reform was shown in the "Outline for Fundamental Reform of the Fiscal Investment and Loan Program" worked out by a Sub-committee of the Fund Operation Council in November 1997. Along the lines of this basic direction, working-level discussions on details of the reform were held at a later date at three working groups set up by the chairman of the Sub-committee. |
| -- | The contents of the discussions and studies made by the working groups under the Sub-committee of the Fund Operation Council were put together in August 1999 in the form of "Summary of the Discussion concerning Fundamental Reform of the Fiscal Investment and Loan Program" and "Policy (Subsidy) Cost Analysis on Fiscal Investment and Loan Program Projects (Estimates)", and they were published after having been reported to the Sub-committee. |
| (2) | Future Schedule |
| -- | Work to finalize specific reform plans for the Fiscal Investment and Loan Program (FILP) will be conducted until December 1999. |
| -- | Bills concerning the reform of the FILP will be submitted to the next ordinary session of the Diet to be convened in January 2000(for implementation of the reform starting in fiscal 2001). |
2. Direction and Significance of the Reform
| (1) | Compulsory deposit of postal savings and pension reserves to the Trust Fund Bureau will be discontinued, and FILP agencies are to raise only the necessary amount of funds based on the market principles (through issuance of FILP agency bonds and FILP bonds). |
| -> | Fund-raising by FILP agencies will be constrained by the market capacity, etc. and will be subject to market appraisal. |
| -> | Such reform will contribute to reforming FILP agencies and making them efficient. |
| (2) | Fund-raising and lending rates will be set in accordance with market principles. |
| -> | This will contribute to the realization of making the FILP system harmonious with the market mechanism. |
| (3) | Policy (Subsidy) Cost Analysis and information disclosure will be further promoted. |
| -> | Materials for policy decision-making will be provided through the expansion of disclosure of information concerning future taxpayer's burdens. This will contribute to improving the control of FILP agencies by taxpayers and the Diet, and ensuring the fiscal disciplines of these agencies. |