>> Japanese
(Tentative Translation)
Regulatory reform is to make it possible for consumers to receive a variety of low-priced, high-quality goods and services through competition and innovations of suppliers and to revitalize the economy by expanding business chances under liberalized environments and by realizing optimal distribution of production factors of the society as a whole. Regulatory reform thus achieves both the "establishment of people/consumer-oriented economic and social system" and the "revitalization of the economy."
In 2001, the first year of the 21st century, it became clear to everyone that the Japanese economy and society are coming to a major turning point. The need to reform economic and social structures has long been advocated. The unemployment rate, which now stands at above 5%, symbolically shows that no time can be wasted in carrying out structural reforms. Under the severe conditions of unprecedentedly serious employment situation, a stagnant economy, and FY reforms that need to be carried out without delay, the necessity of regulatory reform and expectations on its function to spur demand and create new industries and new jobs have been rising. Now is the time to forcibly carry out regulatory reforms as an important pillar to realize structural reform.
Against this background, this Report put together the results of the studies and deliberations conducted during the current fiscal year at the Council for Regulatory Reform (hereinafter to be called "the Council") in response to the request of the Prime Minister, who called on the Council to study and comprehensively deliberate the basic matters concerning regulatory reforms that are necessary to promote reform of economic and social structures.
In making proposals, we would like to emphasize the following points as the Council's basic stance toward regulatory reforms.
In promoting regulatory reforms, the government has successfully focused on "individual regulatory reform" by, for example, responding positively to requests from individual business operators and business bodies. It has also adopted a method to deal with structural reform field by field. However, in order to efficiently promote regulatory reforms and make the reforms successful, it is necessary, in addition to the above methods, to reinforce "systematic, comprehensive regulatory reforms," including the establishment of rules to promote competition and reviews of budgetary appropriation and other related systems, based on specified policy objectives and philosophies. In other words, it is effective to consciously reinforce measures for "reform of the system as a whole."
In particular, the approach of the "reform of the system as a whole" is expected to be effective in forcibly promoting the delayed reform of the "people-oriented service field" ("social field").
And, in abolishing regulations that hinder the free economic activities of private business operators and in promoting competition among them, it is important to positively deal with such problems as the establishment of a supervisory system (including the application of regulations on violators), including mandatory information disclosure, the observation of rules, and securing service quality so that the market can exert its function fully and an ex-post-facto dispute settlement system, the establishment of new rules to enhance safety nets, and clarification of existing rules.
Moreover, under the principle of "what can be done by the private sector should be left to the private sector as much as possible," businesses now operated by public entities (including non-profit organizations under the jurisdiction of public entities) should be transferred to private business operators, including joint stock companies, by as much as possible abolishing regulations that prevent the private sector's entry and eliminating differentials in competition terms, such as the public subsidies involved in businesses that are conducted by different business entities, as part of the regulatory reforms.
Incidentally, not only the central and local government bodies, but also special public corporations, corporations in the public interest, and other public corporations based on special laws are in an advantageous position in competition compared with private business operators. This is an important point to note when promoting regulatory reforms.
Various measures for structural reforms have been successfully implemented so far, as can be seen in a comparison of the present state of such fields as information/communications, finance and transportation with what they were 10 years before. However, there are still many problems that remain unsolved. Reform measures were not necessarily implemented at a speed fast enough to cope with the rapidly changing environment surrounding the Japanese economy and society, such as the aging of the population and decreasing birthrate and the globalization of the economy.
At a time when structural reforms are urgent business, it is important to further accelerate the implementation of reform measures. From the standpoint of securing prompt and firm implementation of measures, the Report in principle specifies the date for implementation of the reform measures.
We believe that disclosing specific schedules for reform measures to be implemented by the government will help both consumers and providers of goods and services to decide their future behavior accurately.
With regard to the "individual people-oriented service field," public entities, as the main provider of services, directly controlled the market and market principles were not fully introduced. This is because many of the "people-oriented services" were considered as "non-profit services." As a result, there are many "regulations" and "public enterprise structures" observed in this field and, due to these problems on the supply side, reform is relatively slow, with cost reduction and improvement of productivity making little progress and qualitative improvement and quantitative expansion of services prevented.
In the future aging society with fewer children, it will be necessary to develop new industries and promote innovation. Since the "people-oriented service field" has a strong potential to increase demand and employment, it is expected that individuals with high entrepreneurial spirit will establish new businesses and expand them promptly.
In light of the importance of the reform of the "people-oriented service field," the Council will make focused studies on the field of medical treatment, welfare/childcare, manpower (labor), education, and the environment, and promote radical systemic reform to create new industries and employment and enhance the quality of national life.
Since cities are bases for living and their renewal is an urgent task, the Council has also decided to make focused study on cities and positively promote regulatory reforms in this field.
Regulatory reforms in the fields that are directly related to industrial activity ("economic field") have made progress, as the government focused its reform efforts on such fields from an early stage. However, even in these fields, there are still many areas that need further regulatory reforms. Needless to say, regulatory reforms in these fields have direct impact on the efficiency of the economy. Therefore, it is extremely important to continue to promote regulatory reforms from the standpoint of structural reforms.
To this end, this Report includes the results of studies on regulatory reform measures in the field of competition policy, legal affairs, finance, distribution, agriculture, forestry and fisheries industries, energy, transportation, and standard/certification, in addition to the six focused fields mentioned above.
As for regulatory reform in the IT field, it was discussed at meetings of the Research Council on IT-related Regulatory Reform under the Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications Network Society (IT Strategic Headquarters), with members of the Council taking part. It is hoped that the IT Strategic Headquarters will study the matter positively on the basis of the results of the meetings.