Rengo requests the 200 billion-yen tax reduction to be enforced: Rengo's emergency economic revival plan
President Washio and General Secretary Sasamori on 4 November 1997 summoned executives of the New Frontier Party, the Democratic Party, the JSDP, the Sun Party, the Harbinger and the Democratic Reform League and demanded Rengo's emergency economic revival plan. These opposition parties and Rengo agreed that some tax reduction should be implemented to improve the current recession. In particular, they all strongly felt the need for the 200 billion-yen tax reduction to be immediately with a possible fund generated out of the reform of the method of ordering public works.
On 5 November Rengo also met Mr. Kato, the LDP's Chief Secretary and remained in the negative position toward the tax reduction, saying "It necessary to take some action. However, we do not think of tax reduction that may sacrifice the future. I am afraid that the tax reduction will only lead to the deposit in the bank, not to the economic revival."

Rengo's Emergency Economic Revival Plan

1. The need of the Plan

Japan is now faced with a serious situation characterized by slow growth and distorted business conditions. The real economic growth rate for April-June is minus 11.2%, which is recorded as low as in January-March 1974 when we experienced the first oil crisis. The unemployment rate remains the highest ever and is forecasted getting worse. At this point we really need to take some emergency measures to stop the recession.
Today's distorted business conditions are mainly caused by the decline of individual consumption accounting for 60% of the GDP. Triple punches, namely the increase of consumption tax, the abolition of the special tax reduction and increasing patients' burden of medical insurance, have oppressed the people's living and the consumption environment has become worse due to an extremely low interest. Consequently, individual consumption has been declined. In addition, the people have gloomy prospects because of distrust to the social security system, which makes the people more cautious about consuming.
The consumption decline has caused the tip-up of production and then the decrease in investment. This is an example of the Government's retrenching financial policy influencing the business trend in a negative way.
While the mid-term structural reform is necessary to remedy the Japanese economy, it is at the same time necessary to implement emergency countermeasures for the economic revival and the improvement in employment. Rengo would propose four major plans to be implemented: 1) the improvement of the consumption environment, 2) the improvement of the investment environment, 3) an emergency employment plan and 4) a plan breaking of the gloomy prospects.

2. Concrete plans

1)　Improvement of the consumption environment
  • Implement the 200 billion-yen income tax reduction by the end of the year
  • Raise the interest rate and set an adequate official rate
  • Freeze temporarily taxing on interest for those with income less than certain amount
  • Deduct from taxed income an interest on loan for the purchase of house and durable consumer goods
2)　Improvement of the investment environment
  • Expand financing to medium and small-sized enterprises and reduce tax rate on the investment of MSEs
  • Treat considerately the environmental investment at the taxation system
  • Formulate a plan promoting the land circulation
3)　Emergency employment plans
  • Expand the employment adjustment subsidiary system and establish a new system to promote employing new employees
  • Expand the subsidiary system to promote stable and continuing employment
  • Create jobs in welfare industries
4)　Plan to ease the gloomy prospects.
  • Carry out the basic reform of the medical system at earlier time
    Reform the pension system

3. Immediate implementation of the NPA's recommendation

The recommendation of the National Personnel Authority is a supplement of basic workers' right of public servants and thus its is the Government's responsibility to fully implement the recommendation.

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