Cablegate: Japanese Morning Press Highlights 08/09/06

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SUBJECT: JAPANESE MORNING PRESS HIGHLIGHTS 08/09/06

Index:

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

Yasukuni issue:
4) Yomiuri poll: 50% of Japanese want the next prime minister to
stay away from Yasukuni Shrine, and 62% want enshrined Class-A war
criminals removed
5) Prime Minister Koizumi hints that he will visit Yasukuni on Aug.
15 as per his original pledge to the public
6) Chief Cabinet Secretary Abe rejects idea of removing Class-A war
criminals from Yasukuni
7) Foreign Minister Aso presents private proposal to secularize
Yasukuni Shrine as means of removing the Class-A war criminals
enshrined there
8) Nine of Koizumi cabinet members say they will avoid Yasukuni on
Aug. 15

9) Meeting between Foreign Minister Aso, ROK Foreign Minister Ban
covers familiar territory of Yasukuni, summit meetings, and EEZ
issue

10) Foreign Ministry to beef up domestic and overseas mission staff

Political agenda:
11) 4,6000 dignitaries attend funeral of late Prime Minister
Hashimoto
12) LDP policy chief Nakagawa wants party to set a timetable for
amending Constitution
13) Looking less likely that Yamasaki, Nukaga with run in LDP
presidential election
14) Nikai, Koga ready to throw their support behind Abe for LDP
president

15) Japan, China, ROK, ASEAN to agree to E. Asia EPA by 2011

16) Government calculates need to hike consumer tax by 3.9% to stop
revenue losses

Articles:

1) TOP HEADLINES

Asahi:
Public servants to be allowed to take half-day parental leave
starting next fiscal year

Mainichi:
691 public and school swimming pools shut down

Yomiuri:
Poll: 50% oppose Yasukuni visits by next prime minister, 62% support
unenshrinement of Class-A war criminals

Nihon Keizai:
Nippon Paper Group completes additional share purchase in Hokuetsu

Sankei:
Government estimates a hike in consumption tax to 8.9% necessary in

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2015 to finance ballooning social security expenditures

Tokyo Shimbun:
Tokorozawa public health department admits defects in application
form for opening pools in Saitama

2) EDITORIALS

Asahi:
(1) Debate on Yasukuni: Abe also should step into ring
(2) Japan expects to join hands with Mongolians

Mainichi:
(1) Defects founds in many pools nationwide
(2) Policy of limiting annual issuance of government bonds to 30
trillion yen did much

Yomiuri:
(1) Make swimming pools safe for children
(2) National personnel Authority's annual recommendations: Wage
reform for public servants takes a step forward

Nihon Keizai:
(1) Deepen dialogue on future options for Yasukuni Shrine
(2) Take thorough measures for safety management of swimming pools

Sankei:
(1) Under Aso's private plan, Yasukuni would no longer be a shrine
(2) Take double safety measures to prevent accidents in pools

Tokyo Shimbun:
(1) Defects in pools: Thorough safety measures urged
(2) Further reform necessary for salaries for civil servants

3) Prime Minister's Official Residence (Kantei)

Prime Minister's schedule, Aug. 8

NIHON KEIZAI (Page 2) (Full)
August 9, 2006

09:30
Attended an executive meeting at party headquarters. Met incoming
Nagano Governor Murai, with Education, Culture, Sports, Science and
Technology Minister Kosaka, Secretary General Takebe, and others.

10:01
Attended a cabinet meeting at Kantei. Met Cabinet Office
International Peace Cooperation Headquarters Chief Tarui. Followed
by Cabinet Secretariat Head Yamamoto.

10:59
Met Cabinet Intelligence Director Mitani. Followed by Deputy Foreign
Minister Nishida and European Affairs Bureau Director General
Harada.

14:02
Attended the funeral of former Prime Minister Ryutaro Hashimoto at
Nippon Budokan.

16:15
Met at Kantei with Deputy Chief Cabinet Secretary Nagase, prime

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ministerial assistant Makino, Deputy Foreign Minister Nishida, and
others.

17:03
Attended a meeting of ministers involved in drawing up monthly
economic reports.

18:05
Met National Personnel Authority President Tani, with Chief Cabinet
Secretary Abe and others. Later, met Deputy Chief Cabinet Secretary

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Nagase.

19:08
Returned to his official residence.

4) Poll: 50% opposed to next premier's visit to Yasukuni Shrine, 62%
favor separating Class-A war criminals from shrine

YOMIURI (Top play) (Full)
August 9, 2006

The Yomiuri Shimbun conducted a face-to-face nationwide public
opinion survey on Aug. 5-6, in which respondents were asked if they
would like the next prime minister to pay homage at Yasukuni Shrine.
In response, "no," including "no to a certain degree," totaled 50%,
with "yes" reaching 40%. "No" was up 8 percentage points from this
June's survey, and "yes" down 6 points. The Yomiuri Shimbun has
asked the same question in three previous surveys since February
this year. In the latest survey, negative answers outnumbered
affirmative ones for the first time.

When Prime Minister Koizumi run in his ruling Liberal Democratic
Party's presidential election in 2001, he pledged to pay homage at
Yasukuni Shrine on Aug. 15, the anniversary of the end of World War
II. In the survey, a total of 49% were negative and a total of 43%
affirmative when asked if they would like him to do so. The survey
shows that an increasing number of people are cautious about the
prime minister's Yasukuni homage.

In the survey, respondents were also asked if they thought Class-A
war criminals should be separated off from those enshrined at
Yasukuni Shrine. In response, "yes" accounted for a total of 62%,
with "no" totaling 24%. As seen from these figures, many showed
their understanding for the idea of unenshrining the Class-A war
criminals from Yasukuni Shrine.

In the meantime, the late Emperor Showa (Hirohito) was quoted as
voicing his displeasure with the enshrinement of the Class-A war
criminals at Yasukuni Shrine, according to a former Imperial
Household grand steward's notes disclosed last month. In this
connection, respondents were asked if they were affected by the
imperial quotes when thinking about the prime minister's Yasukuni
visits, with "yes" accounting for a total of 37% and "no" totaling
55%.

However, "yes" to that question came from 46% of those opposed to
the next prime minister's Yasukuni homage. This seems to be one of
the reasons why the number of those opposed to the next premier's
Yasukuni homage has increased.

In the breakdown of answers from those who support Chief Cabinet
Secretary Abe-one of the three potential post-Koizumi

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candidates-about the next premier's Yasukuni homage, affirmative
answers totaled 55%, with negative answers 38%. Among those
supporting Foreign Minister Aso, affirmative answers accounted for
51% and negative ones 46%. As seen from these figures, affirmative
answers outnumbered negative ones both among Abe supporters and
among Aso supporters. Among those backing Finance Minister Tanigaki,
however, affirmative answers accounted for no more than 26%, with
negative ones totaling 69%. Tanigaki has clarified that he would
abstain from paying homage at Yasukuni Shrine if he became prime
minister. This seems to be one of the reasons why negative answers
substantially outnumbered affirmative ones among Tanigaki
supporters.

Respondents were further asked about a place appropriate for the
state to mourn for the war dead. In response to this question, 35%
picked Yasukuni Shrine at present, with 24% choosing Yasukuni Shrine
that separates the Class-A war criminals, 19% preferring a new
national secular memorial under state control, and 8% favoring
Chidorigafuchi Cemetery. "Yasukuni Shrine at present" topped all
other answers but was lower than the combined total of 52% for
separating the Class-A war criminals from Yasukuni Shrine and
mourning for the war dead at other facilities.

5) Prime Minister Koizumi eager to visit Yasukuni Shrine on Aug. 15

MAINICHI (Page 1) (Full)
August 9, 2006

Asked by reporters about whether his pledge to visit Yasukuni Shrine
on Aug. 15 made during the campaign for the 2001 Liberal Democratic
Party (LDP) presidential election was valid, Prime Minister
Junichiro Koizumi responded last night, "Yes, the election promise
is still valid." He reiterated, however, that he would make a
decision appropriately. Koizumi's aide said, "He will visit the
shrine during the period between the 13th and 16th." He has so far
visited the shrine five times as prime minister, avoiding Aug. 15,
the anniversary of the end of World War II. Prior to leaving the
prime minister's post in September, Koizumi apparently expressed his
enthusiasm to visit the shrine on Aug. 15.

Koizumi made the pledge during an April 2001 debate ahead of the LDP
presidential election, saying: "It is natural for a politician to
offer his respect and appreciation to the war dead. I will visit
Yasukuni on Aug. 15 if I become prime minister, no matter how much I
may be criticized."

Concerned about a negative reaction from China and South Korea,
however, he visited the Shinto shrine on Aug. 13, 2001. He has since
visited Yasukuni once a year on such occasions as the spring and
fall festivals and on New Year's Day.

After paying homage at the shrine in April 2002, Koizumi explained
the reason for avoiding Aug. 15, stating:

"Causing anxiety and a sense of alarm in Japan and overseas by
insisting on a Yasukuni visit on the Aug. 15 anniversary of the end
of the war or around Aug. 15 goes against my will."

Meanwhile, a senior LDP member commented last night: "He's not going
to surprise people and forgo a visit on Aug. 15."

6) Abe negative about separation of Class-A war criminals from

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enshrined souls at Yasukuni Shrine

YOMIURI (Page 2) (Full)
August 9, 2006

Chief Cabinet Secretary Shinzo Abe, interviewed by the monthly
magazine Bungeishunju on sale on Aug. 10, expressed a negative view
about the idea of removing Class-A war criminals from Yasukuni
Shrine, the Yomiuri Shimbun has learned. Abe stated about the
Liberal Democratic Party (LDP) presidential election in September
that in order to protect Japan, a beautiful country with a long
history, firm determination even at the risk one's life is
required.

Abe said that the Yasukuni issue should not be made a political
issue, let alone a diplomatic one. Successive prime ministers made
efforts to avoid such a situation. Four former premiers -- Masayoshi
Ohira, Zenko Suzuki, Yasuhiro Nakasone, and Ryutaro Hashimoto -- and
incumbent Prime Minister Junichiro Koizumi have paid homage at that
Shinto shrine even though Class-A war criminals were enshrined there
in 1978. Abe stated that there is no prime minister who supports
Japan's wartime militarism even though they paid homage at a shrine
that enshrines the leaders of the war. Abe indicated he was negative
about the view calling on the prime minister to stop visiting
Yasukuni.

7) Aso advocates secular status for Yasukuni

NIHON KEIZAI (Page 2) (Abridged)
Eve., August 8, 2006

Foreign Minister Taro Aso, meeting the press yesterday after a
cabinet meeting, unveiled a plan to resolve the Yasukuni Shrine
issue. The plan urges Yasukuni Shrine to give up its religious
status and incorporate the shrine with special status under a new
law for state control. His plan suggests the need for the Diet to
discuss and determine who should be mourned there. This advocacy
paves the way to separate Class-A war criminals from those enshrined
at Yasukuni Shrine.

In his advocacy, Aso proposes putting Yasukuni Shrine under state
control as a national facility. This is aimed at making it possible
for the Emperor and foreign officials to pay their respects there.
Aso began around this January to study specific ideas and worked out
his proposal at this point, a month before the ruling Liberal
Democratic Party's Sept. 8 announcement of its presidential
election.

Aso proposes specific steps to make Yasukuni Shrine secular. In
concrete terms, he urges Yasukuni Shrine and 52 other shrines for
the war dead in the nation to give up their religious status, rename
Yasukuni Shrine as a national memorial for the war dead, and utilize
10-20 billion yen to be returned to the state coffers from the Peace
Memorial Special Fund, an independent administrative entity.

Aso also notes that the doctrine of Yasukuni Shrine will not be the
one and only mourning criterion if the shrine is incorporated with
secular status. In the meantime, Yasukuni Shrine has deemed it
impossible to unenshrine the Class-A war criminals. However, Aso
implies that it would be possible to do so if the shrine is given
special legal status. In addition, Aso asserts that Yasukuni
Shrine's controversial war museum, Yushukan, should be placed under

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government control for appropriate displays.

8) Nine cabinet ministers will not visit Yasukuni Shrine on Aug. 15;
Tanigaki urges Koizumi to stay away

ASAHI (Page 2) Full)
Eve., August 8, 2006

After a cabinet meeting on Aug. 8 of the 17 cabinet ministers,
excluding Prime Minister Junichiro Koizumi, nine members said that
they would not visit Yasukuni Shrine on Aug. 15, the anniversary of
the end of World War II. There were no ministers who said they would
go. Thirteen of the ministers, excluding four now overseas, answered
questions.

The nine ministers include Finance Minister Sadakazu Tanigaki; Koki
Chuma, state minister in charge of regulatory reform; Land,
Infrastructure and Transport Minister Kazuo Kitagawa; Education
Minister Kenji Kosaka; Financial Affairs Minister Kaoru Yosano;
Science and Technology Minister Iwao Matsuda; Health, Labor and
Welfare Minister Jiro Kawasaki; Kuniko Inoguchi, minister in charge
of measures for the declining birthrate; and Economy, Trade and
Industry Minister Toshihiro Nikai. Environment Minister Yuriko Koike
did not clarify her intention. She is expected to be overseas on
Aug. 15.

Matsuda explained why he would not go, saying, "I want to place
importance on relations with Asia." Kosaka said, "When it comes to
official visits, we should give consideration to reactions from
other countries." Kawasaki stated: "It's a matter for individuals to
decide."

Tanigaki, however, urged Koizumi to think carefully about an Aug. 15
visit, saying: "I wonder about the actions of the prime minister
being decided on based solely on individual freedom. Perhaps he
should think about that point a bit more."

Chief Cabinet Secretary Shinzo Abe, meanwhile, stated: "With this
becoming a political and diplomatic issue, I will refrain from
saying whether or not I went there and whether or not I will go
there again."

Agriculture Minister Shoichi Nakagawa said: "I visit Yasukuni on
Aug. 15 every year. I have yet to make a decision this year, though
there is no particular reason for me to change my plans." Foreign
Minister Taro Aso refrained from revealing his plans.

9) Japan-South Korea foreign ministerial: Foreign Affairs and Trade
Minister calls for removing obstacles to holding summit; Wants prime
minister to stop visiting Yasukuni Shrine

TOKYO SHIMBUN (Page 3) (Full)
August 9, 2006

Foreign Minister Taro Aso yesterday evening met in Tokyo with South
Korean Foreign Affairs and Trade Minister Ban Ki-moon, who is now in
Japan to attend the funeral of the late former Prime Minister
Ryutaro Hashimoto that is being jointly held by the Cabinet and the
Liberal Democratic Party (LDP).

During the talks, Ban noted: "It is currently impossible to hold a
summit between our countries. This situation is abnormal. It is

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important to eliminate obstacles for the sake of the normalization
of ties at the earliest date possible." With the anniversary of the
end of World War II on Aug 15 approaching, we tacitly called on
Prime Minister Junichiro Koizumi not to visit Yasukuni Shrine.

Aso simply noted, "I would like to cooperate for strengthened
bilateral relations through frequent meetings with Mr. Ban."

Referring to the Takeshima/Dokdo islets, over which both Japan and
South Korea claim sovereignty, Aso has again proposed introducing a
prior notification system intended to prevent an unexpected
contingency from occurring in the event of either country conducting
a scientific survey in waters claimed by both countries as their
EEZ. Ban responded: "I am aware of the importance of both of our
countries forming an amicable maritime order. South Korea is still
continuing to looking into specific measures."

Aso and Ban also discussed North Korea's ballistic missile issue.
They reaffirmed their stance of strengthening bilateral cooperation
for the early return of Pyongyang to the six-party framework in
accordance with the resolution adopted by the United Nations
Security Council.

10) LDP proposes having more than 150 embassies abroad to reinforce
Japan's diplomacy

NIHON KEIZAI (Page 2) (Abridged)
Eve., August 8, 2006

The ruling Liberal Democratic Party held the first meeting of its
special committee this morning, seeking to consolidate and reinforce
Japan's diplomacy. The committee, with former Prime Minister Yoshiro
Mori presiding, worked out a report of urgent recommendations to be
budgeted for next fiscal year. In its report, the committee points
to the weakness of Japan's diplomatic corps overseas as compared
with Europe, the United States, and China. The report suggests the
need for Japan to have 2,000 more diplomats at its overseas posts
for a global posting setup of 7,500 diplomats. In addition, the
report also says Japan should have more than 150 embassies abroad.
The Foreign Ministry will incorporate these recommendations in its
budget request.

11) 4,600 Japanese and foreign dignitaries attend Hashimoto's
funeral

YOMIURI (Page 4) (Full)
August 9, 2006

The funeral of former Prime Minister Ryutaro Hashimoto, who passed
away in July, was held at the Nippon Budokan Hall in Tokyo
yesterday. The cabinet and the Liberal Democratic Party organized
the funeral. About 4,600 local and foreign dignitaries, including
Crown Prince Naruhito, attended the funeral.

Representing the cabinet, Prime Minister Junichiro Koizumi delivered
a eulogy:

"On the slogan 'Reform and Creation,' he devoted his political
career to reforms to reinvent the country's political,
administrative, economic, and social systems."

12) LDP policy chief: Next LDP president should show timetable for

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constitutional reform

NIHON KEIZAI (Page 2) (Full)
August 9, 2006

Liberal Democratic Party (LDP) Policy Research Council Chairman
Hidenao Nakagawa, referring in a speech in Tokyo to the post-Koizumi
government, stated yesterday:

"The next LDP president should aim to form a solid government,
serving the two full terms of six years. The next government as a
constitutional reform government should present a timetable and
policy direction for constitutional revision."

13) 2006 LDP presidential race: Cautious views growing about
Yamasaki, Nukaga joining race; Many eager to back Abe, the right
horse

YOMIURI (Page 4) (Excerpts)
August 9, 2006

Former LDP Vice President Taku Yamasaki, who heads the Yamasaki
faction, and Defense Agency Director-General Fukushiro Nukaga of the
Tsushima faction are considering running in the September LDP

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presidential race. But cautious views are growing in their
respective factions. Given Chief Cabinet Secretary Shinzo Abe's big
lead, the trend reflects the desire of politicians to back the right
horse.

Four mid-level and junior members of the Yamasaki faction, including
Ryotaro Tanose, held talks with Yamasaki yesterday in Tokyo. In the
session, they urged Yamasaki to display leadership in a way that
would unite the faction, including the question of his possible
candidacy for the presidency. They also insisted on enlivening the
presidential race by utilizing the faction's policy proposals to
guide it to a victory in next year's Upper House election. In
response, Yamasaki said: "I will make a decision after thinking
things through. I am planning to reach a clear decision after the
mid-August Bon holiday break."

Their request was taken to mean a call on Yamasaki to give up his
candidacy. That is because many Yamasaki faction members are eager
to rally around Abe, although some still think their leader should
join the race. LDP Policy Research Council Vice Chairman Akira
Amari, former Education Minister Takashi Kosugi, and former Defense
Agency Director-General Yoshinori Ono of the Yamasaki faction
attended yesterday a meeting of veteran LDP lawmakers supporting
Abe.

Meanwhile, former Health and Welfare Minister Yuji Tsushima, who
heads the Tsushima faction, met yesterday with General Council
Chairman Fumio Kyuma at LDP headquarters. Kyuma expressed a cautious
view about Nukaga joining the race, saying: "No one in the faction
is actively urging him to run in the race. I think many feel the
same way as I do." Tsushima and others have confirmed a plan to
discuss the matter among faction leaders to reach a conclusion in
mid-August or later.

Some mid-level and junior members of the Tsushima faction are
calling for fielding Nukaga, but many executives and mid-level
members are leaned toward forgoing his candidacy.

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14) Koga, Nikai decide to support Abe in LDP presidential race;
Abe's predominance clear

YOMIURI (Page 1) (Abridged slightly)
August 9, 2006

Former LDP Secretary General Makoto Koga, who heads the Niwa-Koga
faction in the party, and Economy, Trade and Industry Minister
Toshihiro Nikai, who heads the Nikai faction, have decided to
support Chief Cabinet Secretary Shinzo Abe in the September LDP
presidential election. Koga conveyed his decision to Policy Research
Council Chairman Nakagawa, who is close to Abe. With the decision to
back Abe by Koga, who was regarded as a leader of anti-Abe forces,
the great majority of the Niwa-Koga faction members is also expected
to throw their support behind Abe. The Nikai faction is also likely
to rally around Abe in unison. Abe's predominance has now become
evident, with some 190 LDP lawmakers out of the 403 having made up
their minds to back him.

According to a person concerned, Koga met Nakagawa earlier this
month in Tokyo. In the session, Koga expressed his intention to
support Abe, saying: "A battle with an Ozawa-led Minshuto is
expected to occur in the next three years. Veteran lawmakers need to
back up Mr. Abe, who is still young." Koga reportedly also expressed
eagerness to serve as a mediator between senior lawmakers, who have
strong aversion to a drastic generational change, and Abe.

Meanwhile, Nikai, a pro-China lawmaker, originally showed concern
over Abe's Asia policy, but he has decided to back Abe based on his
close ties with Nakagawa. The Nikai faction released yesterday a set
of policy proposals that stopped short of referring to the Yasukuni
issue, indicating simply to discuss Asia policy in the party.

Nakagawa, Koga, and Nikai are scheduled to meet in mid-August or
later to confirm their plan to rally around Abe.

Ten senior LDP lawmakers, including party tax commission chairman
Hakuo Yanagisawa of the Niwa-Koga faction, former Management and
Coordination Agency chief Seiichi Ota, and Agriculture, Forestry and
Fisheries Minister Shoichi Nakagawa of the Ibuki faction, held talks
with Abe yesterday in Tokyo and clarified their support for Abe.

Yanagisawa and others attended the meeting because former Health and
Welfare Minister Yuya Niwa, another leader of the Niwa-Koga faction,
has approved to back Abe.

The breakdown of support for Abe at present: 86 Mori faction
members, most of the 15 Nikai faction members, over 30 members of
the 48-member Niwa-Koga faction, more than 30 members of the 70
unaffiliated lawmakers, and some 10 members out of the 32-strong
Ibuki faction. In addition, several members each of the Tsushima,
Yamasaki, and Komura factions have expressed their support of Abe.

15) ASEAN+3 aims to create EPA covering all of East Asia in 2011

NIHON KEIZAI (Page 1) (Full)
August 9, 2006

In their ministerial meetings later this month, 13 countries -
Japan, China, South Korea, and the members of the Association of
Southeast Asian Nations (ASEAN) - are likely to decide to start
talks on an economic partnership agreement (EPA) covering the entire

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East Asian region. They plan to start laying down rules in a wide
range of areas, including intellectual property, in addition to
abolishing tariffs on goods. The 13 countries aim to begin
government-to-government talks next year and conclude an agreement
in 2011.

In a bid to lessen China's influence, Japan wants an EPA that covers
a wider area in the region. Economy, Trade and Industry Minister
Toshihiro Nikai is ready to propose that India, Australia, and New
Zealand be added to the 13 countries. Should agricultural countries
like Australia join the accord, however, Japan would be urged to
speed up the opening of its farm market, and the negotiations
eventually might encounter difficulty.

In the ASEAN+3 economic ministerial in 2004, China came up with the
idea of an EPA. A panel of experts from the public and private
sectors has pushed ahead with drafting a plan. The plan is likely to
be adopted in the ministerial meeting slated for late this month.

Under the draft plan, the governments of the 13 countries would
begin discussion next year and full-scale negotiations in 2009. They
would make preparations to abolish tariffs on goods, and undertake
liberalization and create rules regarding services, investment, and
other areas. In 2011, they would conclude the negotiations and
completely end tariffs on general goods in 2016.

If realized, the region would be a free trade zone worth 7-8
trillion dollars in production, making it the third largest
following the North American Free Trade Agreement (NAFTA) and the
European Union (EU).

Preparations are underway for ASEAN to reach free trade agreements
(FTA) with China, India, South Korea, Japan and other countries.
This development has contributed to move the EPA concept forward.

16) Government estimates need to hike consumption tax to 8.9% in
fiscal 2015; Social security expenses to increase

SANKEI (Top Play) (Excerpts)
August 9, 2006

The government and the ruling parties are now considering the
possibility of covering an increased portion of social security
expenses (the portion funded by tax revenues) through a hike in the
consumption tax. It was revealed yesterday that the government
estimates that it is necessary to raise the consumption tax 3.9
points by 2015. The government also projects the need to further
hike the tax 7 points by 2025. The predominant view in the ruling
camp is to raise the consumption tax to 8% from the current 5%.
According to this plan, a lack of funds to finance social security
is bound to become a problem several years after the hike, having a
major impact on future consumption tax discussions.

The tentative estimate has been calculated by automatically working
out consumption tax rates needed to finance an increase in social
security expenses based on the Outlook for the Payments and Burden
of Social Security Benefits (figures projected in May 2006) compiled
by the Ministry of Health, Labor and Welfare, which discounts the
effects of the ongoing medical system reform, and data provided by
the Ad Hoc Council for Discussion on the Fiscal System. Estimated
revenues from the consumption tax per percentage point are 2.7
trillion yen in 2015 and 3.2 trillion yen in 2025.

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The government and the ruling camp are aiming at achieving a primary
balance in fiscal 2011. The increase in social security expenses
this year is projected at 5.8 trillion yen, combining 2.7 trillion
yen to finance an increase in the state's share of the basic pension
to 50% and 3.1 trillion yen to finance the social security system,
including medical services and nursing-care expenses. The 5.8
trillion yen is equivalent to 2.3% in terms of consumption tax,
meaning that a 3% hike in the consumption tax could cover increased
social security expenses.

SCHIEFFER

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