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 RENGO
held its 2nd Government-Labor Meeting with the Obuchi Cabinet at the
Prime Minister's official residence on the evening of December 9. President
Washio submitted a written request to PM Obuchi, which included drawing
up the 4th supplementary budget for the 1998 fiscal year with more than
¥4 trillion income tax cuts and the toughening of employment countermeasures.
In reply to the request PM Obuchi said, "The 4th budget will be
difficult to implement, but we will deal with the 15-month budget multi-dimensionally
and continuously."
This was the 2nd Government-Labor meeting since the Obuchi Cabinet has organized. There were nine attendees from the government side including Prime Minister Obuchi, Chief Cabinet Secretary Nonaka, Labor Minister Amari. Of the ten attendees from RENGO at the table, President Washio, Deputy President Enomoto, Secretary General Sasamori were among those present.
At the beginning of the meeting, RENGO pressed for the creation of a 4th supplementary budget for the 1998 fiscal year with ¥4 trillion in income tax cuts, and other issues including raising interest rates on deposit accounts, and the implementation of the Million Job Creation Plan in January 1999. Prime Minister Obuchi answered, "The 4th budget will be difficult to implement, but we will deal with the 15-month budget multi-dimensionally and continuously so there are no breakdowns. If there are good points in the RENGO proposal, we will certainly take them under serious examination." Later when the RENGO side reiterated the necessity of the 4th supplementary budget, PM Obuchi showed emotion, responding in his own words. With regard to toughening employment measures, Labor Minister Amari said "It is thought that through the Million Job Creation Plan 370,000 jobs will be created and another 630,000 preserved. We will endeavor to prepare ourselves for the actual circumstances." RENGO will also submit requests to the Ministries of Finance, Welfare, and the Economic Planning Agency in the future.
The Request (summary)
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| I. Toughening Economic and Employment Measures through the 1998 Fiscal Year 4th Supplementary Budget |
Enforce a ¥4 trillion income tax cut, a ¥4 trillion provision, a ¥2 trillion institutional tax cut, and employment measures from January 1999. Earmark revenue sources for them by the 4th supplementary budget for the 1998 fiscal year.
1. Enforce income tax cuts, provisions, and institutional tax cuts from January 1999, creating economic recovery.
(1) ¥4 trillion Plus Income Tax Cut
(1) To make tax cuts effective for low-income households, implementation of a minimum tax rate of 5% would change the tax rate scale to 5, 10, 20, 30, 40, and 50%. The 10 and 20% tax brackets should be expanded. Taxable income in the 5% bracket should be raised to ¥1 million, the 10% bracket to ¥5 million, and the 20% bracket to ¥10 million.
(2) Maintain current minimum tax levels. Conduct a thorough re-evaluation for the dependents deduction system.
(3) Maintain resident tax rates. Implement cuts by expanding each bracket, while seeing that revenue source funding is the government's responsibility.
(2) ¥4 Trillion Provision
Introduce a ¥2 trillion-plus provision in dependent allowances (¥10,000 for the 1st and 2nd children throughout compulsory education, and ¥20,000 from the 3rd child) and create a one-time provision of nearly ¥2 trillion for seniors (an addition of ¥5,000 a month in benefits) to improve the economy.
(3) Corporate Tax Cuts
Achieve a fair base tax while at the same time reducing tax rates. In addition, tax-exemption of fringe benefits (extralegal welfare costs) should be maintained.
(4) Institutional Tax Cuts
(1)Housing tax cuts (2)Education tax cuts (3)Employment development deductions (4)Environmental tax breaks (5)Automotive tax breaks (6)Tax breaks for information investment, etc.
2. Seek to create jobs and stabilize employment by toughening employment measures.
(1) Aid "Employment Adjustment Grants System" by regional industries and industrial park groups.
(2) Raise the ceiling for "advances of wage arrears" in the Wage Payment Security Act and allow more flexibility in recognition of "wage arrears."
(3) Relax the enforcement standards for the nationwide extension of the Employment Adjustment Grants System. General accounts will be applied to this revenue source.
| II. Regarding the Budget for the 1999 Fiscal Year (omitted) |
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