Chairman's Comment on the "Basic Policy on Policy Finance Reforms"

The Council on Economic and Fiscal Policy published the "Basic Policy on Policy Finance Reforms" on November 29. JBA released the Chairman’s comments on the basic policy as follows.

With regard to policy finance reforms, we have maintained a firm position on three important matters. They are: (1) The role of policy finances must be reviewed vis-a-vis the needs of today, (2) Leave what the private sector can do to the private sector while taking developments in the private financial sector into consideration, and (3) Distinctly change the flow of funds from the government to the private sector, limiting the scale and method of financing policy finances to a minimum. We have also stressed the necessity of establishing a monitoring committee comprised of third parties to conduct constant reviews.

The "Basic Policy on Policy Finance Reforms" released today set forth the principles for policy finance reforms to be "abolishing all policy finances except three functions," "cutting policy finances in half to realize a small efficient government," etc. Furthermore, it sorts the functions performed by the present policy finances into three categories: "those to be abolished," "those that are necessary and will be left as they are" and "those that are necessary for the moment but will be abolished in the future." Concerning functions that are presently necessary for policy finances, the basic policy states that they are to be reviewed in the future by conducting market tests within an evaluation and monitoring committee that is yet to be established.

Steps to prepare related laws and for the shift to new entities are to take place hereafter. We strongly request that the structure reform principle of "Leave what the private sector can do to the private sector" be adhered to in the process and that level competition fields with private financial institutions be secured when privatizing governmental institutions.