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Statement by the Minister of Finance at the start of the New Ministry of Finance

January 6, 2001

Statement by the Minister of Finance
at the start of the New Ministry of Finance 
(provisional translation)


   Today, with the transition to a new structure resulting from the reorganization of the central government, the Ministry of Finance has changed its Japanese name to "Zaimusho". It will engage in fiscal and economic management in cooperation with other relevant organizations.
On this occasion, I would like to outline the policies of the new ministry.

(Basic recognition)
   In the past half century after World War II, Japan recovered from the devastation of the war to achieve spectacular economic growth. Such splendid prosperity was brought about by a system based on cooperation between the public and the private sectors, which shared the common value of economic affluence.
   However, toward the end of the last century, this system premised on a common value was placed under increasing pressure to undergo radical reform, due to drastic changes in socio-economic situations both at home and abroad. At a global level, with the end of the Cold War, the legitimacy of once dominant values has been called into question. In Japan, the collapse of the bubble economy bequeathed a negative legacy and a prolonged economic stagnation thereafter; the economy cannot be expected to grow continuously as it did before. We are also witnessing enormous structural changes, such as the rapid aging of the population resulting from the decline in the birthrate, and the globalization of the economy accompanied by the dramatic developments in information technology. Against this background, the citizens' interests have become more complicated, and their senses of value more diversified at an ever-increasing speed. 
   Under such circumstances, it is hoped that the Japanese socio-economy in the new century will be a freer and fairer system, in which each citizen will be more responsible for making his/her own choices and become more actively involved in the nation and society.
   In shaping such a socio-economy, the government also needs to transform itself. We believe that the government is expected to fully carry out its role of forming a free and fair socio-economy with complicated interests and diversified senses of value, by offering its citizens alternatives and striving to form a national consensus.

(New Ministry of Finance)
   The Ministry of Finance always played an important role in fiscal and economic management, from Japan's postwar reconstruction throughout its period of high economic growth.
   In recent years, however, both the government and the private sector have been under pressure to respond to the above-mentioned dramatic changes in socio-economic situations both at home and abroad. The Ministry of Finance is no exception, as there have been some critical charges that it has not been adequately responding to these changes.
   Along with its sincere efforts for self-reform to date, with the advent of the new century, the new Ministry of Finance (Zaimusho) will take new steps, both in name and in substance, toward realizing a sound and dynamic economy and a safe and prosperous society, as well as contributing to the steady development of the world economy. The Ministry will manage the overall national finances through efficient and transparent administration in the interests of its citizens as taxpayers. 

(Challenges of the new Ministry of Finance)
   The Ministry of Finance will tackle the following challenges at home and abroad in order to fulfill its mission as a government entity in the new era.
   First of all, we believe it is important for the Ministry to contribute to the steady development of the Japanese socio-economy, by implementing appropriate fiscal and economic management; that is, formulation of prioritized and efficient budgets as well as fiscal investment and loan programs; planning of a tax system that is in line with the principles of taxation -- "fair," "neutral," and "simple." In order to secure a sound foundation for the Japanese socio-economy, the Ministry will also strive to: appropriately manage the government's assets, liabilities and national treasury; maintain confidence in the national currency; and ensure proper declarations and payments of taxes and customs duties.
   Accumulation of a huge amount of debt leads to fiscal rigidity, which might eventually hinder the development of the socio-economy itself. It is an important task for the Ministry to establish a sustainable fiscal structure that can adequately respond to wide-ranging challenges. For this purpose, the Ministry needs to review expenditures, especially those of social security; the taxation system; and the relationship between central and local governments; while keeping in mind economic conditions as well as the ideal socio-economy in the new century. 
   In addition, there is no question that Japan is expected to play an active role in the realization of a free and fair international economy and its steady development, given its substantial weight in the globalized world economy. The experience of the Asian currency crisis tells us that it is more necessary than ever for Japan to strengthen cooperation with other Asian countries and to actively contribute to their economic stability. With these in mind, the Ministry of Finance will endeavor to stabilize the international monetary system, strengthen regional cooperation in Asia, and promote orderly development of international trade. 

(Future direction of the Ministry of Finance) 
   The government needs to adjust itself to the changes in the socio-economy, with its citizens having more complicated interests and diversified values. The Ministry of Finance will place emphasis on the following three points.
   Firstly, the Ministry of Finance will strive to enhance the transparency of its policies. The Ministry will actively provide accurate information to its citizens, and at the same time, will enhance the transparency of the governments' fiscal conditions and budget-making process. Today, the Ministry published the mission of the new Ministry of Finance and its policy objectives, along with the implementation guidelines for policy assessment. The policy assessment system is intended to make the views of the Ministry of Finance widely known to the public, so that the Ministry can discharge its accountability for the contents and implementation of its policies. In other words, the Ministry of Finance projects to the public its policies and the implementation thereof, and evaluates and disciplines itself based on the responses. The Ministry will strive for a steady implementation of this system.
   Secondly, the Ministry will conduct policies from the taxpayers' viewpoint. To this end, the Ministry will provide opportunities to seek inquiries and opinions from the public regarding its policies. In addition, dramatic developments in information technology offer a good chance to enhance the quality and efficiency of public services. The Ministry intends to promote the use of information technology in areas such as the electronic processing of national tax and customs procedures. 
   Thirdly, it is also vital for the government to conduct effective and efficient administration that is backed by sophisticated expertise. The Ministry will train its staff to ensure this necessary expertise and good judgment. At the same time, it will promote policy formation in close consultation with experts in various fields and with market participants. Through these efforts, the Ministry of Finance hopes to live up to the citizens' expectations, by dealing with a mountain of challenges, with an eye on the coming new trends and free from the constraints of conventional wisdom. 

(Concluding remarks)
   Every Ministry of Finance official has renewed his/her determination to best perform one's duty with a sense of responsibility and pride in being a public servant, so that the reorganization of the central government will bear steady fruit. We ask for your understanding and cooperation.