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Cablegate: Japanese Morning Press Highlights 02/20/08

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UNCLAS SECTION 01 OF 11 TOKYO 000433

SIPDIS

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DEPT FOR E, P, EB, EAP/J, EAP/P, EAP/PD, PA;
WHITE HOUSE/NSC/NEC; JUSTICE FOR STU CHEMTOB IN ANTI-TRUST DIVISION;
TREASURY/OASIA/IMI/JAPAN; DEPT PASS USTR/PUBLIC AFFAIRS OFFICE;
SECDEF FOR JCS-J-5/JAPAN,
DASD/ISA/EAPR/JAPAN; DEPT PASS ELECTRONICALLY TO USDA
FAS/ITP FOR SCHROETER; PACOM HONOLULU FOR PUBLIC DIPLOMACY ADVISOR;
CINCPAC FLT/PA/ COMNAVFORJAPAN/PA.

E.O. 12958: N/A
TAGS: OIIP KMDR KPAO PGOV PINR ECON ELAB JA

SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 02/20/08


Index:

1) Top headlines
2) Editorials
3) Prime Minister's daily schedule (Nikkei)

Aegis collision with fishing boat:
4) It took 120 minutes before Prime Minister Fukuda was informed
about the Aegis destroyer's collision, 90 minutes before Defense
Minister Ishiba notified (Yomiuri)
5) Aegis accident seen as another blow for the Fukuda Cabinet and
for the Defense Ministry's reform efforts (Mainichi)
6) Defense Ministry's crisis management system being questioned
after Aegis collision blunder (Yomiuri)
7) Eruption of criticism of handling of Aegis collision (Nikkei)
8) Democratic Party of Japan (DPJ) pursuing the accountability of
Defense Minister Ishiba after the Aegis accident (Nikkei)

USFJ incidents:
9) U.S. forces Japan forbids military personnel in Okinawa, Iwakuni
to leave base for the time being (Asahi)
10) USFJ designates Feb. 22 as a "day of reflection" (Yomiuri)

11) Vice Minister Yabunaka to travel to China for talks on the
gas-field development issue (Yomiuri)

12) DPJ President Ozawa will visit South Korea today (Asahi)

Political agenda:
13) Lower House plenary today to deliberate the provisional gasoline
tax issue (Asahi)
14) DPJ will not budge on the tax issue (Mainichi)
15) Cabinet decision put off on controversial issue of restricting
foreign investment in airports (Mainichi)

Articles:

1) TOP HEADLINES

Asahi:
Aegis destroyer began trying to avoid collision with fishing boat
only shortly beforehand

Mainichi:
Atago had obligation under law to avoid collision

Yomiuri:
Destroyer became aware of boat only two minutes before collision

Nikkei:
Health insurance premiums for corporate employees to be raised on
higher care costs for elderly

Sankei and Tokyo Shimbun:
Aegis destroyer became aware of boat only one minute before
collision; fishermen still missing

Akahata:
MSDF vessel collides with fishing boat; Search for father, son
underway

2) EDITORIALS

TOKYO 00000433 002 OF 011

Asahi:
(1) Why could Aegis destroyer not avoid collision?
(2) Toshiba's speedy decision to give up on HD-DVD

Mainichi:
(1) Aegis destroyer needed more caution
(2) Greater efforts required for next-generation DVDs

Yomiuri:
(1) An Aegis-equipped vessel should never hit a boat
(2) Unified DVD standards good news for consumers

Nikkei:
(1) Toshiba's decision on DVD business
(2) Lessons not learned form Natasha accident

Sankei:
(1) Aegis accident: MSDF lacks sense of intensity
(2) Personnel selection for key positions requiring Diet approval

Tokyo Shimbun:
(1) Aegis collision should not have occurred
(2) Chain of distrust in gyoza must be terminated

Akahata:
(1) Aegis destroyer had obligation to avoid collision

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, February 19

NIKKEI (Page 2) (Full)
February 20, 2008

08:00
Met with Chief Cabinet Secretary Machimura, Land, Infrastructure and
Transport Minister Fuyushiba and Defense Minister Ishiba in the Diet
building. Attended meeting of ministers-related to pension-records
mess. Attended cabinet meeting afterward. Machimura remained.

09:26
Met at Kantei with Deputy Chief Cabinet Secretary Ono, followed by
Deputy Chief Cabinet Secretary Futahashi.

10:23
Met with LDP Upper House Chairman Otsuji, followed by former Saitama
Gov. Tsuchiya. Met later with Vice Foreign Minister Yabunaka,
followed by Special Advisor Ito.

12:04
Met with Machimura.

13:02
Attended Lower House plenary session.

15:58
Met with LDP National Strategy Headquarters Secretary General
Sugiura.

16:07
Met at Kantei with Ishiba, Vice Defense Minister Masuda and MSDF

TOKYO 00000433 003 OF 011


Chief of Staff Furukawa.

17:30
Attended IT Strategy Headquarters meeting.

18:40
Met Small and Medium-sized Enterprises Research Commission Chairman
Kaneko, followed by New Komeito leader Ota and Small and
Medium-sizes Enterprises Revitalization Headquarters chief
Shirahama.

19:29
Met editorial writers of various media companies at ANA
Intercontinental Hotel Tokyo.

21:07
Returned to his official residence.

4) MOD's poor communication system again exposed; Prime minister not
informed of Aegis accident for 120 minutes, defense minister for 90
minutes

YOMIURI (Page 3) (Full)
February 20, 2008

The Aegis collision incident exposed the Ministry of Defense's delay
in transmitting information, as seen in the fact that it took an
hour and a half to make its initial report on the incident to
Defense Minister Shigeru Ishiba and two hours to Prime Minister
Yasuo Fukuda.

What is especially problematic is the fact that it took 50 minutes
to report on the matter to the defense minister after its initial
report to the Maritime Staff Office. MOD press officer Toyoda
explained in a press conference yesterday: "It was because the
officer in charge made contact with the vice minister and bureau
chief in stages after confirming the facts."

According to the vice-defense minister notification regulations on
accidents, the Staff Offices of the Ground, Maritime, and Air
Self-Defense Forces or the Joint Staff are required to report minor
accidents to the defense minister via internal bureaus. In the case
of a major accident, they are required to report directly to the
defense minister within one hour by skipping internal bureaus. In
the wake of the Aegis accident yesterday, the Maritime Staff Office
reported it only to internal bureaus, as in the case with a minor
accident.

Given the situation, Prime Minister Fukuda yesterday morning ordered
relevant government offices to speed up communication. Defense
Minister Ishiba called last evening Vice-Defense Minister Kohei
Masuda to the Prime Minister's Office (Kantei) and reprimanded him,
saying: "Information reached me quite late. It was extremely bad."

Ishiba then said to the press: "I don't expect real-time
information, but information must reach me in about 10 minutes. I
would like to enforce a system in which an initial report doesn't
have to be that accurate." The prime minister emphatically said last
night: "It took too long for information to reach the cabinet
minister in charge. The system must be corrected. I want the SDF and
the Defense Ministry to seriously think about what is really
important."

TOKYO 00000433 004 OF 011

A delay in communication within MOD has long been regarded as a
problem. When a Chinese Navy nuclear submarine entered waters new
Ishigaki Island, Okinawa Prefecture, in 2004, it took the then
Defense Agency chief nearly three hours to issue an order for
maritime security operations due to a delay in reporting the
incident to him.

The fact that information on the underreported fuel Japan provided
to a U.S. supply ship in the Indian Ocean had not gone beyond the
responsible division also came to light last year. In the wake of
former Vice-Defense Minister Takemasa Moriya's lavish entertainment,
including golf outings, by a defense contractor, Defense Minister
Ishiba has decided to require all senior ministry officials carry
GPS-equipped cell phones as part of his effort to improve the
internal communication system. But changing the nature of MOD does
not seem easy.

5) Fukuda again to blame

MAINICHI (Page 2) (Full)
February 20, 2008

The Atago, an Aegis-equipped destroyer of the Maritime Self-Defense
Force, collided with a fishing boat early yesterday in Pacific
waters off Chiba Prefecture, causing the boat to capsize and leaving
its two crewmen missing. The accident will likely be a serious blow
to Prime Minister Yasuo Fukuda, with his cabinet's support rate
edging down. The government, belated in taking initial action, is
now being called into question over its planned reform of the
Defense Ministry under the initiative of the prime minister's office
or Kantei. Fukuda has been trying to boost his government. However,
he is now saddled with another difficult problem.

Last week, the Kantei launched new advisory panels and announced
their members in an aim to make an appeal on Fukuda's initiative.

In January, Fukuda addressed the Diet with his policy speech,
advocating his idea of "consumer-oriented administration." The
Kantei has now set up an advisory panel of experts to study this
idea, and its first meeting was held on Feb. 12. On the following
day, Feb. 13, Fukuda appointed former Financial Services Minister
Tatsuya Ito as his special advisor for social security. In addition,
Japan this summer will host the Group of Eight (G-8) summit at
Toyako (Lake Toya) in Hokkaido. With this forthcoming event in mind,
the Kantei will launch another advisory panel this week to discuss
global warming countermeasures.

The accident occurred just when the Kantei was about to gear up to
turn Fukuda's administration around, complicating his efforts before
they could even start.

Defense Minister Shigeru Ishiba was informed of the accident one and
a half hours after its occurrence. Fukuda was notified two hours
later. Chief Cabinet Secretary Nobutaka Machimura, meeting the press
yesterday, reiterated that Fukuda gave the order for rescue. In the
sea, however, rescue activities had been going on without the prime
minister's order for as long as two hours.

In November 2004, a Chinese nuclear-powered submarine was spotted
violating Japan's territorial waters. In that event as well, the
government had a problem with its communication. In September 2005,

TOKYO 00000433 005 OF 011


the then Defense Agency issued a notification of reporting
guidelines under the name of its administrative deputy director
general (vice minister). The notification expressly stipulated that
the Self-Defense Forces must report any serious incident or accident
from SDF officers in charge to the defense minister via his
secretary. If the Defense Ministry had followed this regulation, the

SIPDIS
report this time could have been shortened by nearly one hour.

The Kantei is to blame for the belated action. In this case, the
Defense Ministry and the MSDF are expected to be directly under
fire. However, rapid communication is on the agenda of an advisory
panel that was set up at the Kantei in December last year for a
reform of the Defense Ministry. The government's failure to
communicate without delay this time shows that the panel's
discussions under the Kantei's initiative have produced no results.

Ishiba called on Fukuda at the Kantei yesterday evening. Ishiba then
reported a plan to create a system for the GSDF, MSDF, and ASDF
chiefs of staff to contact the defense minister in an emergency.
However, it was too late.

6) Aegis ship hits boat: Concern accident could lower already
sagging cabinet support ratings; Opposition parties determined to
pursue crisis management

YOMIURI (Page 4) (Full)
February 20, 2008

A delay in reporting the collision caused by the Maritime
Self-Defense Force's Aegis-equipped destroyer to Prime Minister
Fukuda has revealed that the government's crisis management system
is insufficient. Voices concerned about the possibility that this
could further lower already-sluggish cabinet approval ratings are
growing in the ruling parties. The opposition camp is determined to
pursue the defectiveness of the government's crisis-management
system and to shed light on the cause of the accident.

One senior official of the Liberal Democratic Party (LDP) yesterday
impatiently said, "The accident will affect national sentiment. If
it becomes clear that the prime minister lacks leadership ability,
cabinet support rates will drop 5 points or so at once." Some ruling
party members said that the accident occurred at the worst possible
time for the administration, as the prime minister had just launched
efforts to set up an experts' council to come up with his own policy
in line with the administration's slogan of "administration for
working people and consumers." If he comes under fire for his
response to the accident, his efforts to place his imprint on the
administration would come to nothing.

Reflecting a sense of alarm, criticism of the Defense Ministry
dominated a meeting of the LDP General Council. Secretary General
Ibuki demanded detailed accounts from a bureau director general
representing the Defense Ministry. When he explained what happened,
participants voiced criticism.

Alert to the possibility of the opposition parties' pursuit of
responsibility reaching the prime minister and Defense Minister
Ishiba, the ruing parties stressed that though there was a delay in
the report, the prime minister properly gave an order to rescue the
victims.

In response, Democratic Party of Japan (DPJ or Minshuto) President

TOKYO 00000433 006 OF 011


Ozawa pointed out, "Something that should not have happened has
occurred. The government's emergency communication system is not
working in the communications area or on any front." Regarding the
defense minister's responsibility, he simply said, "He is no doubt
responsible. However, there are various ways for him to take
responsibility."

The predominant view at a meeting of the DPJ's Foreign Affairs and
Defense Division was that the delay in the report revealed the
government's crisis control system is unreliable.

7) Flaws in communications network exposed by Aegis destroyer's
collision with fishing boat; criticism erupts over MOD's slow
response; crisis management questioned

NIKKEI (Page 2) (Full)
February 20, 2008

With the collision yesterday of the Aegis destroyer Atago and a
fishing boat, the government was busy holding meetings to deal with
the accident. Meanwhile, the accident exposed flaws in the
government's communications network for emergencies, with a first
report of the accident to Defense Minister Shigeru Ishiba being
delayed. Depending on the cause of the accident, the defense
minister may be forced to take responsibility. The opposition
parties are gearing up to grill the government over its initial
insufficient response to the accident, together with the series of
scandals involving the Ministry of Defense (MOD). The Aegis
collision is certain to deal a blow to the Fukuda administration.

"Indeed, the report on the collision came too late. Why did it
happen? We need to investigate it," Prime Minister Yasuo Fukuda said
in a firm tone in response to questions from the press corps at the
Prime Minister's Official Residence (Kantei) yesterday evening. The
defense minister was informed of the collision one hour and 30
minutes after it happened, and the prime minister two hours
afterward. According to aides to the prime minister, Fukuda learned
of the collision at around 6:00 a.m. at the Kantei residence. Around
when TV news programs reported on the collision, Fukuda was informed
by his secretary about the accident. Reportedly, at the time Fukuda
told his secretary in an angry voice: "Why did the report come so
late?"

The collision is the first test of the Fukuda administration's
crisis management capability. The moment he received the first
report of the accident, Fukuda instructed relevant ministries and
agencies via his secretary to "make every effort to search for
missing fishermen." At 8:00 a.m., Fukuda called Chief Cabinet
Secretary Nobutaka Machimura, Ishiba, Minister of Land,

SIPDIS
Infrastructure and Transport Tetsuzo Fuyushiba to the Diet for
emergency consultation. Machimura moved up his regular press
briefing and emphasized that the government intends to quickly
rescue the missing fishermen.

The Aegis accident, however, will be certain to have a negative
impact on the government as the cause of the accident is
investigated and if the Self-Defense Forces' (SDF) initial response
is found to be problematic. MOD and the SDF have been already
plagued by a series of scandals, including former Vice Defense
Minister Takemasa Moriya's bribe-taking, information leakage on the
Aegis system, and the correction of the amount of fuel supplied by a
Maritime Self-Defense Force (MSDF) vessel to other countries'

TOKYO 00000433 007 OF 011


vessels in the Indian Ocean. In addition, the approval ratings for
the Fukuda cabinet have been trending downward. Concern is growing
that the accident will affect management of the government.

Even in the ruling bloc, there was an eruption of criticism. At a
joint session of the ruling Liberal Democratic Party's (LDP)
National Defense Department and other committees, severe views were
voiced by participants with one member arguing, "(The SDF) will lose
the public's confidence because of the succession of scandals."
Another participant noted, "Such an accident defies common sense."
The junior coalition partner New Komeito's Representative Akihiro
Ota, after meeting with Fukuda at the Kantei, told the press: "The
most serious problem was that the first report came too late."

Similar accidents have occurred in the past. One was the collision
of the MSDF's submarine Nadashio and a fishing boat in July 1988.
Another was the collision of the U.S. nuclear-powered submarine and
the training boat Ehime-maru.

In the case of the Nadashio accident, then Defense Agency
Director-General Tsutomu Kawara resigned to take responsibility.
When the Ehime-maru collision occurred, then Prime Minister Yoshiro
Mori came under heavy fire for continuing to play golf even after
learning of the collision. Depending on how this case unfolds, the
Fukuda administration may come under fire for its inability to work
out any effective measure to deal with various problems involving
MOD and the SDF. In this sense, the Fukuda administration is faced
with a new destabilizing factor.

8) DPJ to pursue defense minister's responsibility

NIKKEI (Page 2) (Excerpts)
February 20, 2008

At a press briefing yesterday, Ichiro Ozawa, president of the major
opposition Democratic Party of Japan (DPJ), spoke of Defense
Minister Shigeru Ishiba's responsibility for yesterday's collision
involving an Aegis destroyer and firmly noted: "We need to inquire
about why it occurred. No doubt he is responsible for it." Referring
to the delayed notification in the government, Ozawa said: "A quick
response system in emergencies has not yet been established in every
aspect." Ozawa went on to say: "The Constitution has no provision
for crisis management. Since the war, Japan has lacked a sense of
crisis management."

9) USFJ slaps curfew on all troops in Okinawa, Iwakuni

ASAHI (Page 1) (Full)
February 20, 2008

In the wake of an Okinawa-based U.S. Marine's alleged rape of a
junior high school girl and other incidents, U.S. Forces Japan
announced yesterday evening that U.S. military personnel and others
belonging to U.S. military bases in Okinawa Prefecture and in the
city of Iwakuni, Yamaguchi Prefecture, will be prohibited from going
out of their respective bases for the time being from 7:30 a.m.
today. This action follows a series of incidents brought about by
U.S. servicemen in Japan. In addition, USFJ also said it had
designated Feb. 22 as a "day of reflection" for all U.S. troops in
Japan.

The USFJ-announced curfew has been imposed on U.S. military

TOKYO 00000433 008 OF 011


personnel and others living on the premises of U.S. military bases
in Okinawa Prefecture and in the city of Iwakuni, according to USFJ
and the Foreign Ministry. Their off-base activities will be limited
to minimum necessary places like workplaces, chapels, schools, and
medical facilities.

U.S. servicemen and other U.S. military personnel living in off-base
housing are also mandated to stay on base, except for driving or
using a taxi between their bases and houses, according to USFJ and
the Foreign Ministry. The curfew is indefinite.

On Feb. 20, designated as a day of reflection, USFJ will scale back
on training and other programs within a scope which will not affect
its operations. All U.S. troops in Japan will be urged to think of
their professionalism.

The curfew this time will be imposed on about 30,000 U.S. military
personnel, USFJ said.

10) USFJ designates February 22 as "day of reflection"

YOMIURI (Page 38) (Abridged slightly)
February 20, 2008

In the wake of a series of incidents, including the alleged sexual
assault (on Feb. 10) by a U.S. Marine in Okinawa, U.S. Forces Japan
announced yesterday that it will impose a curfew for the time being
on all Army, Navy, Air Force, and Marine service members in Okinawa
starting on the morning of Feb. 20. Although a curfew banning going
out at night has been imposed in the past, the one this time is
unusually strict, allowing even service members living off base to
commute only between their bases and homes, regardless of the time.

Also designating February 22 as a "day of reflection," USFJ decided
to require all service members in Japan to confirm their strict
observance of discipline. The U.S. military also released a
statement yesterday reading: "Commander Bruce Wright will
immediately respond to any unacceptable conduct by U.S. service
members in cooperation with the Japanese government. All U.S.
service members must act responsibly even while off duty."

11) Sub-cabinet-level meeting on gas fields: Yabunaka to visit China
starting on Feb. 22

YOMIURI (Page 4) (Full)
February 20, 2008

It has been confirmed that Vice Foreign Minister Mitoji Yabunaka
will visit China on Feb. 22-23 to hold sub-cabinet-level talks with
his counterpart Wang Yi. The aim is to undertake coordination of
views on the joint development of gas fields in the East China Sea
in the run-up to Chinese President Hu Jintao's visit to Japan slated
for April.

The Japanese government will call on China to include in a sea area
subject to joint development not only the Japanese side of the
Japan-China median line but also the Chinese. Talks with China,
which is reluctant to accept the proposal, are expected to be
confrontational. Concerning the tainted Chinese-made gyoza, both
countries will confirm cooperation in the investigation into the
cause of the incident. Chinese State Councilor Tang Jiaxuang will
visit Japan today and discuss that and other issues with Prime

TOKYO 00000433 009 OF 011


Minister Fukuda.

12) DPJ's Ozawa off to Seoul today

ASAHI (Page 4) (Full)
February 20, 2008

Democratic Party of Japan (DPJ or Minshuto) President Ichiro Ozawa
will visit South Korea today to meet tomorrow with President-elect
Lee Myung Bak. He is expected to exchange views with Lee on the East
Asia situation, including the Korean Peninsula, ahead of Prime
Minister Yasuo Fukuda, who will visit Seoul to attend the
inauguration of President Lee on Feb. 25. Attention is fixed on
whether Ozawa will be more specific on the issue of whether to give
permanent foreign residents suffrage in local elections, over which
there remain different views in the DPJ.

Ozawa will visit South Korea for the first time since he assumed his
present post. Asked by reporters about his planned meeting with Lee,
Ozawa said yesterday: "In the world, Japan and South Korea share
many common things. Cooperating based on a relationship of trust is
extremely effective." He is expected to exchange views on the issue
of suffrage for permanent foreign residents, as well as North
Korea's nuclear program and the Chinese economy. He will also give a
keynote speech at a symposium in which former U.S. Secretary of
State Henry Kissinger and others will take part.

13) Lower House begins debate on provisional tax rates

ASAHI (Page 4) (Full)
February 20, 2008

The House of Representatives yesterday started debate on tax
reform-related bills, which include measures to retain for another
10 years the provisional gas and other auto-related taxes. The focus
is on whether the ruling and opposition camps will be able to reach
a conclusion by the end of March on the bills following the
mediation by the leaders of the two Diet chambers. However,
maneuvering between the ruling parties and the largest opposition
Democratic Party of Japan (DPJ or Minshuto) has continued over
whether the DPJ will agree to hold consultations on revising the
bills by presenting its own counterproposals and over whether the
bills will be amended at the Lower House or House of Councillors.

When asked in yesterday's Lower House Budget Committee session about
the possibility of revising the government's bills, Prime Minister
Yasuo Fukuda responded: "The opposition camp should present its own
bill if it wants to revise the government's bills. Vice President
Katsuya Okada said: "If we agree to implement the present road
construction plan, the road plan will naturally not be completely
implemented." A senior DPJ member, however, argued: "If we show our
bill in detail, the ruling camp would attack us, arguing that it
will be impossible to build road under the DPJ's plan." As it
stands, there remain the two views in the largest opposition party.

The ruling coalition will be forced to make tough decisions on
whether to secure a time for deliberations on revising the bills at
the Upper House by getting them through the Lower House as early as
in February as the provisional taxes will expire at the end of March
and on whether to agree to revise them at the Lower House, assuming
that deliberations will be dragged out at the opposition-controlled
Upper House.

TOKYO 00000433 010 OF 011

In yesterday's Lower House plenary session, the opposition bloc
pursued the way of using revenue from the gasoline and other
auto-related taxes. DPJ's Shinichiro Furumoto stated: "Without even
making an estimate, a ten-year road construction plan has been
decided." Fukuda repeatedly answered: "About 10 more years are
needed for the road construction."

In a meeting of the Lower House Financial Affairs Committee held
after the plenary session, the DPJ called on the government to
present policy assessments, which are preconditions for a mid-term
plan of the 10-year road construction program, Finance Minister
Fukushiro Nukaga responded: "Policy assessments are not carried out
on individual items. We will assess through annual budget
compilation from now on." Debate became tangled since the DPJ was
not satisfied with the answers. After a long interruption, the
session ended before the scheduled time.

14) LDP, DPJ unable to move to revise bill amending taxation law,
with some voicing opposition

MAINICHI (Page 2) (Full)
February 20, 2008

The focus of attention in deliberations on a bill amending the
Special Taxation Measures Law is on whether a conclusion would be
reached by the end of this fiscal year in accordance with a proposal
made by the heads of both houses of the Diet. On whether to revise
the bill, both the Liberal Democratic Party (LDP) and the Democratic
Party of Japan (DPJ) remain unable to reach an agreement, as some
members are against it.

LDP House of Councillors Diet Affairs Committee Chairman Seiji
Suzuki said in a press conference yesterday: "The idea of revising
the bill has not been talked about. I have heard nothing about it
from the House of Representatives, so I do not have the idea in
mind." The ruling camp is aiming to get the tax bill through the
Lower House by the end of this month in order to pass the bill and
the budget bill for fiscal 2008 within this fiscal year. Given the
situation, revising the bill in the Lower House seems difficult. As
such, the Upper House also finds it impossible to refer to revisions
for now.

In the ruling camp, though, many members think it is necessary to
make revisions in order to bring the DPJ into voting on the tax
bill. Such suggestions are floating as shorting the period of
extension of the current provisional tax rates from the proposed ten
years to five years.

On the mid-term plan on road construction, for which 59 trillion yen
is said to be needed over the next decade, LDP Policy Research
Council Chairman Sadakazu Tanigaki hinted that the plan could be
revamped, remarking: "It (59 trillion yen) is the upper limit. The
amount could be reduced."

But many LDP members think that this "is not sufficient to draw out
a flexible stance from the DPJ," as a senior LDP Policy Research
Council member said. Reflecting such a view, some lawmakers are
calling for adding more to the roughly 190 billion yen put in the
general account. But some LDP members are expected to raise
objections to a delay in road construction. At it stands, the ruling
camp remains unable to unify views.

TOKYO 00000433 011 OF 011

In the DPJ, there are also members who publicly assert that the
provisional tax rates should be maintained. But a party executive is
trying to forestall the ruling bloc by saying: "If full discussion
is not conducted, the conditions set in the proposal by the speakers
from both houses will not be satisfied."

15) Government puts off cabinet decision on bill on airport
ownership to March, reflecting split

MAINICHI (Page 2) (Full)
February 20, 2008

The government decided yesterday to put off to March a cabinet
decision on a bill amending the Airport Improvement Law to limit
foreign stakes in airport operators. The decision reflects growing
dissent from some cabinet members. Chief Cabinet Secretary Nobutaka
Machimura tried to solicit an agreement, but he failed to iron out
differences between the Ministry of Land, Infrastructure, &
Transportation, which calls for restrictions by emphasizing
security, and the Financial Services Agency, which voices concern
about a decline in foreign direct investment. The issue is likely to
bog down.

The Transport Ministry is developing a bill to limit the voting
rights of foreign investors to less than one-third in such major
airport operators as Narita International Airport Corp. and Japan
Airport Terminal Co.

But Financial Services Minister Yoshimi Watanabe and other two
cabinet ministers have expressed opposition to the bill. Concerned
about the lack of unity in the cabinet, bureau directors of relevant
government agencies are now restudying the bill under the lead of
Machimura.

SCHIEFFER

© Scoop Media

 
 
 
 
 
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