VZCZCXRO5797
PP RUEHFK RUEHKSO RUEHNAG RUEHNH
DE RUEHKO #6979/01 3490305
ZNR UUUUU ZZH
P 150305Z DEC 06
FM AMEMBASSY TOKYO
TO RUEHC/SECSTATE WASHDC PRIORITY 9081
INFO RUEKJCS/SECDEF WASHDC PRIORITY
RHEHAAA/THE WHITE HOUSE WASHINGTON DC PRIORITY
RUEAWJA/USDOJ WASHDC PRIORITY
RULSDMK/USDOT WASHDC PRIORITY
RUCPDOC/USDOC WASHDC PRIORITY
RUEAIIA/CIA WASHDC PRIORITY
RUEKJCS/JOINT STAFF WASHDC//J5//
RHHMUNA/HQ USPACOM HONOLULU HI
RHHMHBA/COMPACFLT PEARL HARBOR HI
RHMFIUU/HQ PACAF HICKAM AFB HI//CC/PA//
RHMFIUU/COMUSJAPAN YOKOTA AB JA//J5/JO21//
RUYNAAC/COMNAVFORJAPAN YOKOSUKA JA
RUAYJAA/COMPATWING ONE KAMI SEYA JA
RUEHNH/AMCONSUL NAHA 1649
RUEHFK/AMCONSUL FUKUOKA 9168
RUEHOK/AMCONSUL OSAKA KOBE 2597
RUEHNAG/AMCONSUL NAGOYA 8714
RUEHKSO/AMCONSUL SAPPORO 0196
RUEHBJ/AMEMBASSY BEIJING 5177
RUEHUL/AMEMBASSY SEOUL 1271
RUCNDT/USMISSION USUN NEW YORK 2750

UNCLAS SECTION 01 OF 12 TOKYO 006979 
 
SIPDIS 
 
SIPDIS 
 
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 12/15/06 
 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule 
 
4) Jiji poll shows drastic plunge of 9.5 points in Abe Cabinet 
support rate to 41.9% 
 
Defense and security issues: 
5) Defense "Ministry" to be launched next month as bill clears the 
Diet today 
6) Foreign Ministry worried about the new political clout of the new 
defense ministry and that it will lose the lead in security policy 
 
7) Government to present USFJ realignment-related bills to the next 
regular Diet session that starts in January 
8) USFJ realignment costs to include 100 billion yen in subsidies to 
local communities hosting US bases, with related legislation to be 
submitted next year 
 
North Korea problem: 
9) US to tell North Korea at restarted 6-party talks it will 
guarantee its security in return for its scrapping nuclear program 
 
10) Prime Minister Abe states that Japan's highest priority at 
upcoming 6-party talks on North Korea will be the abduction issue 
11) Government formally adopts tougher restrictions on North Korean 
exports 
 
12) Japan seeking breakthrough on deadlocked territorial talks with 
Russia, so idea of splitting the northern islands, as Foreign 
Minister Aso stated, is a possibility 
 
Political agenda: 
13) Ruling, opposition camps reach basic agreement on revisions to 
bill setting referendum on constitutional reform 
14) Education reform bill to pass the Diet today, first revision of 
basic law in 59 years 
15) Ruling camp ready to extend the current Diet session, expecting 
a no-confidence resolution from an intransigent opposition camp 
16) Ruling parties set tax system reform outline that gives priority 
to hefty corporate tax cuts, slights individual taxpayers 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Ruling coalition tax reform outline proposes 1 trillion yen in tax 
cuts, little impact on households 
 
Mainichi: 
Ruling camp tax reform plan calls for 600 billion yen in tax cuts, 
focusing on revitalizing corporations 
 
Yomiuri: 
Bill amending Basic Education Law to pass into law today, making 
first revision in 59 years 
 
Nihon Keizai: 
Japan Tobacco reaches basic agreement to acquire Britain's Gallaher 
 
TOKYO 00006979  002 OF 012 
 
 
for 2.2. trillion yen in biggest takeover by Japanese company 
 
Sankei: 
Simulation on nuclear attack on Tokyo by bomb similar to one dropped 
on Nagasaki: 50,000 people would be killed, 5 million injured 
 
Tokyo Shimbun: 
Ruling coalition tax reform plan focuses on corporate tax cuts 
 
Akahata: 
LDP, New Komeito take forced vote on education reform bill at Upper 
House committee, ignoring public opinion 
 
2) EDITORIALS 
 
Asahi: 
(1) Tax reform plan: Corporate tax cut unreasonable 
(2) Abolishing of Social Insurance Agency is enough step for 
reforms 
 
Mainichi: 
(1) Final report on town meetings: Tax money was used for the 
government's stage-management of town meetings 
(2) Tax reform plan for FY 2007: What happen to the government's 
fiscal reconstruction efforts 
 
Yomiuri: 
(1) India is strong partner for regional cooperation 
(2) Tax reform outline: "Consideration" is not enough for budget for 
next fiscal year 
 
Nihon Keizai: 
(1) Half improvement in tax reform plan for economic revitalization 
 
Sankei: 
(1) Northern Territories divided into two parts? What is Foreign 
Minister Aso thinking about? 
(2) Ruling coalition tax reform plan: Government should explain 
drastic reform plan now 
 
Tokyo Shimbun: 
(1) What is the real purpose of upgrading the Defense Agency 
Ministry to a ministry? 
(2) Can the government regain public confidence by just abolishing 
the Social Security Agency? 
 
Akahata: 
(1) No reason to force a vote on bill amending Basic Education Law 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, December 14 
 
NIHON KEIZAI (Page 2)  (Full) 
December 15, 2006 
 
08:03 
Met Deputy Chief Cabinet Secretary Suzuki at the Kantei. 
 
09:00 
Upper House Special Committee on the Basic Education Law 
 
 
TOKYO 00006979  003 OF 012 
 
 
12:06 
Handed over a recommendation letter to a person expected to run in 
the Aichi Prefecture gubernatorial election at the LDP headquarters. 
Secretary General Nakagawa was present. 
 
SIPDIS 
 
12:41 
Received the Indian prime minister and his wife at the Kantei. Then 
attended an event welcoming them. 
 
13:05 
National Gathering to Consider Abduction Issue held at the Hibiya 
Hall. 
 
16:11 
Indian Prime Minister Singh delivered a speech at the Lower House 
plenary session hall. 
 
17:33 
Meeting of the Council on Economic and Fiscal Policy at the Kantei. 
Then met Chief Cabinet Secretary Shiozaki. 
 
19:43 
Met with the chairman of the Indian Industry Federation and others 
at Four Seasons Hotel Chinzanso Tokyo. Then met with Singh. 
 
20:12 
Opening ceremony for the Japan-India Exchange year at Chinzanso. 
 
22:12 
Arrived at the official residence. 
 
4) Poll: Cabinet support nosedives to 41.9% 
 
TOKYO (Page 2) (Full) 
December 15, 2006 
 
The rate of public support for the cabinet of Prime Minister Shinzo 
Abe in December was 41.9%, down 9.5%age points from last month, 
according to findings from a Jiji Press poll released yesterday. The 
popularity rating for the Abe cabinet leveled off over 50% in 
October and November. However, it substantially dropped three months 
after the Abe cabinet came into office. In the survey, respondents 
were asked if they would support the ruling Liberal Democratic 
Party's reinstatement of its "postal rebels," who voted against the 
LDP-led government's now-enacted package of postal privatization 
bills in the Diet as LDP members and were ousted from the LDP. In 
response to this question, "no" added up to 53.2%. This problem, as 
well as the faking of questions for government-sponsored town 
meetings, is believed to have led to the sharp drop in the Abe 
cabinet's support rate. 
 
The survey was conducted Dec. 7-10 across the nation on a 
fact-to-face basis, with a total of 2,000 persons chosen from among 
men and women aged 20 and over. The response rate was 67.3%. 
 
Meanwhile, the disapproval rating for the Abe cabinet was 27.0%, up 
7.2 points from last month. It has been rising since the Abe 
cabinet's inauguration. The top-ranking reason given for not 
supporting the Abe cabinet was "nothing can be expected," accounting 
for 13.5%, up 3.2 points from last month. 
 
5) 'Defense Ministry' to launch next month 
 
TOKYO 00006979  004 OF 012 
 
 
 
NIHON KEIZAI (Page 2) (Abridged) 
December 15, 2006 
 
The House of Councillors Foreign and Defense Affairs Committee 
yesterday approved a government-introduced package of legislative 
measures to upgrade the Defense Agency to the status of a ministry, 
and the legislation is certain to be enacted into law in the current 
Diet session. The Defense Agency will hurry to prepare for its 
upgrading set for Jan. 9 next year. The agency, after becoming a 
ministry, will be empowered to present its own bills in cabinet 
meetings. It will now go further than to oversee the Self-Defense 
Forces and is enthusiastic about planning security policies on its 
own. 
 
Even so, there is no knowing how far the Defense Agency can carry 
weight if a National Security Council is set up at the prime 
minister's office. There are also issues that can't wait like the 
planned realignment of US forces in Japan, so the agency cannot be 
just wild with joy over its upgrading. 
 
The Defense Agency is currently under the Cabinet Office. Competence 
related to national security is vested in the prime minister, who is 
in charge of the Cabinet Office. The agency can only present 
legislative measures through the Cabinet Office. Above all, the 
agency, since the SDF came into being, has desired to have its own 
minister who is in charge of Japan's security policy. 
 
Meanwhile, the Foreign Ministry used to take the initiative in 
Japan-US Security Consultative Committee (SCC) or "two-plus-two" 
ministerial meetings. The Defense Agency cannot attend the six-party 
talks over North Korea. The agency, both internally and externally, 
has been seen as an "accessory" to the Foreign Ministry. The agency 
therefore wants to wipe away such an image. 
 
The issue of realigning the US military presence in Japan is one of 
the few issues initiated by the Defense Agency. Defense Agency 
Director General Fumio Kyuma has also underscored the necessity of 
implementing US military realignment in a steady way. However, there 
are many challenges in store, such as coordination with Okinawa 
Prefecture. In addition, US Secretary of Defense Rumsfeld will soon 
go out with his replacement coming in. The driving force of 
realignment is therefore feared to weaken in the United States. 
 
The Defense Agency has yet to clear up its role sharing with the 
Foreign Ministry and the prime minister's office. The Foreign 
Ministry outwardly welcomes the Defense Agency's upgrading to a 
ministry. In October this year, however, North Korea conducted a 
nuclear test. At the time, the Foreign Ministry insisted that the 
event should be recognized as a "neighboring contingency," while the 
Defense Agency was cautious about it. The Foreign Ministry and the 
Defense Agency would inevitably be at odds with each other whenever 
there are needs for the SDF's overseas activities. 
 
6) Defense Agency set to become ministry; Foreign Ministry alarmed 
at new ministry's political power and that it may take lead in 
security policy 
 
ASAHI (Page 3) (Abridged slightly) 
December 15, 2006 
 
The Defense Agency, which was established in 1954, will become the 
 
TOKYO 00006979  005 OF 012 
 
 
Defense Ministry in January 2007. Since the end of the Cold War, the 
Defense Agency and the Self-Defense Forces have conducted not only 
the defense of the homeland -- their main duty -- but also overseas 
missions, such as peacekeeping operations and joining multinational 
forces. The upgrade is certain to increase their political power in 
decision-making on security policies, as well as their 
responsibilities. The upgrading is likely to bring about some change 
in its relationship with the Foreign Ministry, which has taken the 
lead in the country's security policy, centering on the United 
States. 
 
Defense AgencQRk>Q;Q>NQ[ 
2RQhe act as a "regional contingency." 
 
The Foreign Ministry was eager to recognize it as a contingency, 
while the Defense Agency, aware of the US Defense Department's 
reluctance to conduct ship inspections, was unwilling to do so. "You 
cannot grasp Washington's true intention correctly unless you 
directly obtain information from the US Defense Department," a 
senior Defense Agency official explained. 
 
Japanese and US senior foreign and defense officials met on Dec. 4 
to discuss the planned relocation of Futenma Air Station from 
Ginowan to Cape Henoko in Nago. In the session, the US side demanded 
approach lights be installed at four spots on the envisaged V-shaped 
pair of runways so that US military aircraft would be able to fly 
into the runways from both ends of the runways. The Defense Agency 
approved two-way landings in emergency situations, and an agreement 
was reached with US concessions. 
 
The upgrade will enable the "defense minister" to directly request 
cabinet meetings for submitting bills, allowing the Defense Agency 
to move from the control of the Cabinet Office. "As an office 
responsible for policy, the upgrade seems to require a different 
level of awareness," Kyuma noted. Responsibility for security policy 
is expected to grow. 
 
The Foreign Ministry is increasingly alarmed at the upgrade. "The 
agency is still hiding its claws. If they try to nip at our heels, 
we will fight back," a senior Foreign Ministry official warned. The 
comment reflects the Foreign Ministry's fear that the "Defense 
Ministry" will directly collect foreign intelligence and deal with 
other countries independently. 
 
 
TOKYO 00006979  006 OF 012 
 
 
7) Gov't to present US military realignment bills 
 
NIHON KEIZAI (Page 2) (Full) 
December 15, 2006 
 
The government and the ruling parties will hold a meeting today to 
consult on the planned realignment of US forces in Japan. They are 
expected to confirm a course of action to present a package of 
realignment-related legislative measures to the Diet in its ordinary 
session to be called in January next year. The legislation features 
a plan to allocate additional subsidies for municipalities accepting 
US military facilities. 
 
8) USFJ realignment: 100 billion yen in new subsidies to be granted 
to affected local governments; Government plans to submit related 
bills to regular Diet session next year 
 
MAINICHI (Page 1) (Full) 
December 15, 2006 
 
In a bid to promote the realignment of US forces in Japan, the 
government plans to provide fresh subsidies to affected 
municipalities. It yesterday started coordination of views on the 
size of the subsidies with the possibility of granting 100 billion 
yen over 10 years. It will earmark 5-6 billion yen in the fiscal 
2007 budget as the first installment. In a related development, the 
government has firmed up a policy of submitting a set of bills 
incorporating the establishment of a realignment subsidy system and 
other issues to the regular Session of the Diet next year. It 
intends to obtain approval from the ruling parties at a meeting of 
the government and the ruling parties to be held today to discuss 
the USFJ realignment at the Prime Minister's Official Residence. 
 
The bills, which are temporary legislation with a 10-year time 
limit, are centered on the allocation and disbursement of the 
realignment subsidies and outlays for expenses for the transfer of 
Marines stationed in Okinawa to Guam to be shouldered by Japan. 
 
Realignment subsidies will be granted to affected municipalities, 
whose burdens to host US base facilities will increase. 
 
The government intends to urge local governments that are reluctant 
to the implementation of the USFJ realignment, such as Iwakuni City, 
Yamaguchi Prefecture, to accept the plan by earmarking realignment 
funds in next fiscal year's budget. For Okinawa Prefecture, in 
addition to providing realignment subsidies, the government plans to 
continue the existing northern area development policy. It aims with 
this approach to bring about the planned transfer of Futenma Air 
Station's facilities in Nago City to the coastal part of Camp 
Schwab. 
 
9) In upcoming 6-party talks, US likely to propose "security 
guarantee" to DPRK on condition of its nuclear abandonment 
 
NIHON KEIZAI (Page 8) (Full) 
December 15, 2006 
 
Hiroshi Maruya, Washington 
 
The US Bush administration intends to convey to North Korea during 
the upcoming six-party talks set to start on Dec. 18 that it is 
ready to confer a security guarantee to North Korea if it drops its 
 
TOKYO 00006979  007 OF 012 
 
 
nuclear weapons programs. The joint statement released in September 
2005 by the six-party talks laid out steps for normalization of 
diplomatic relations between the US and North Korea in the way of 
matching their respective policies. By reiterating the need to 
follow those steps, Washington aims to strongly pressure Pyongyang 
to abandon its nuclear programs. 
 
President Bush has stated: "If North Korea opts for the path of 
peace, then the US, along with other members of the six-party talks, 
is ready to guarantee North Korea's security." Specifically, the US 
would declare an end to the Korean War, where there is presently 
only a truce, and also declare it is ready to initiate talks on 
normalization of diplomatic ties so as to sign a peace treaty. 
 
China, the chair of the six-party talks, has sounded out the US and 
other members about the possibility of establishing working groups 
to talk about economic assistance and other measures as mentioned in 
the joint statement. The proposed working groups include the one for 
talks on diplomatic normalization. The proposals the US has made to 
the North include Pyongyang's acceptance of inspectors from the 
International Atomic Energy Agency (IAEA) and freezing its nuclear 
facilities at Yongbyon. Washington is readying itself to enter into 
substantive talks at a working group once Pyongyang comes up with a 
concrete response. 
 
Even on the financial sanctions imposed on North Korea, the US has 
indicated a plan to launch overtures for a working group based on 
Pyongyang's requests. Washington is thus assuming a flexible 
approach in an effort to accelerate talks. US Assistant Secretary of 
State Christopher Hill, the chief representative to the six-party 
talks, stated at a press briefing on Dec. 13: "We expect tangible 
progress." Essential for that are measures for the implementation of 
the joint statement. As one tactic, the US has come up with the idea 
of holding overtures on the financial issue between the US and North 
Korea. 
 
The US and the North are both looking for a compromise point. When 
asked what will be achieved definitely, Hill has repeatedly shown a 
cautious position, noting: "I never can tell before the start of the 
talks." 
 
China has simply conveyed to other members that the upcoming session 
will be a good one." But what response the North will come up with 
remains unclear. A rumor flying around among the countries concerned 
is that the US may think about a small package (small achievement). 
 
10) Prime Minister Abe expresses resolve to prioritize abduction 
issue in negotiations with North Korea 
 
ASAHI (Page 4) (Full) 
December 15, 2006 
 
The government held its first gathering to consider the abduction in 
Tokyo yesterday. In a speech at the gathering, Prime Minister Abe 
expressed his determination to give top priority to a settlement of 
the abduction issue in negotiations with North Korea. He said, "As 
long as I am in office as prime minister, I will follow without fail 
the principle of not responding to normalization talks unless the 
abduction issue is resolved." The gathering was held as part of "the 
week to consider North Korea's abuse of human rights (Dec.10-16)," a 
program starting this year. About 850 people participated in the 
gathering, including abductees' families. 
 
TOKYO 00006979  008 OF 012 
 
 
 
11) Japan to tighten regulations applicable to DPRK 
 
YOMIURI (Page 4) (Full) 
December 15, 2006 
 
At a cabinet meeting today, the government will revise the Foreign 
Exchange Ordinance and the Export Trade Control under the Foreign 
Exchange and Foreign Trade Control Law in order to strengthen the 
regulations on exports to North Korea, for instance, exports of such 
products that could lead to production of weapons of mass 
destruction. 
 
At present, in the case of exporting military convertible computers 
or telecommunications-related equipment to such countries as North 
Korea, if their prices are 50,000 yen or above, exporters are 
obligated to obtain permission from the minister of economy, trade 
and industry (METI). But the prices of those products are falling 
now. For instance, integrated circuits capable of decrypting are 
traded at prices of 5,000 yen or below, so exporters of all those 
products will be obligated to obtain the METI minister's permission. 
In addition, if domestic firms mediate trade between third countries 
or if they reload trade cargo from a third country's ship to another 
third country's ship at Japanese ports, those firms will be 
obligated to obtain the METI minister's permission. 
 
12) Northern Territories issue: Japan moving to find a way out, 
envisioning the possibility of dividing islands into two equal 
parts 
 
ASAHI (Page 4) (Excerpts) 
December 15, 2006 
 
Some in the Japanese government are moving to look for ways to 
resolve the long disputed Northern Territories issue between Japan 
and Russia, envisioning the possibility of dividing the disputed 
territories into two equal parts by area. Japan wants to settle the 
issue while the Putin administration of Russia, which is positive 
about resolving the issue, is in office. As part of efforts to find 
a clue for resolving the issue, Japan intends to use the upcoming 
vice minister-level strategic dialogue with Russia slated for early 
next year as an aid for the start of a full-fledged bilateral 
dialogue. 
 
"Approximately 25% of Etorofu Island plus the remaining three 
islands (Kunashiri, Shikotan, and Habomai) constitute 50% of the 
total acreage of the four northern islands," Foreign Minister Aso 
stated at the Lower House Committee on Foreign Affairs meeting on 
Dec. 13. 
 
On the Northern Territories issue, Japan's position has been that 
the four northern islands are Japan's territory, and following that 
position, Japan has insisted that the four islands all be returned 
to Japan. Russia, however, has asserted that the issue be resolved 
if two islands, Habomai and Shikotan, are returned (to Japan), in 
accordance with the 1956 Japan-Soviet Union Joint Declaration. At 
the committee meeting, Aso also stated, "Adhering to either the 
return of two islands or the return of four islands is no more than 
a matter of winning or losing; consequently both sides cannot reach 
an accord." He thus indicated the need to look for ways to bring 
about a practical solution. 
 
 
TOKYO 00006979  009 OF 012 
 
 
On the territory issue, a bottleneck for Japan in relations with 
Russia, the Japanese government has recently become active. The vice 
minister-level strategic dialogue between Japan and Russia, which 
was proposed in the Japan-Russia foreign ministerial talks in 
November, is scheduled to take place in late January. High on agenda 
in the dialogue will be the territory issue. Administrative Vice 
Foreign Minister Shotaro Yachi, who enjoys the confidence of Prime 
Minister Abe and who recently achieved results in vice 
minister-level talks with China and South Korea, will work at the 
forefront in the planned dialogue with Russia. 
 
According to a government official, this move has come against the 
backdrop of the government's calculation that progress on the 
territory issue would help boost the Abe administration. With 
relations with China and South Korea progressing now, some in the 
government have begun viewing Russia as the next centerpiece of 
Japanese diplomacy. "The prime minister, as well, is very eager" to 
promote relations, an aide to the prime minister said. 
 
Also, another conceivable reason is that President Putin, who is 
willing to resolve the territory issue, is to step down from his 
post in the spring of 2008. During a press conference in January of 
this year, Putin stated: "I've begun looking for ways to resolve the 
issue in a way to be acceptable to both Japan and Russia." 
 
13) Ruling camp, Minshuto reach broad agreement on revisions to 
referendum bill 
 
YOMIURI (Page 2) (Full) 
December 15, 2006 
 
In a meeting of the House of Representatives' Constitution Research 
Council yesterday, the Liberal Democratic Party, Minshuto 
(Democratic Party of Japan), and the New Komeito reached a basic 
agreement on revisions to the referendum bill governing procedures 
for constitutional revision. The three parties agreed on these key 
points: (1) Specify the age of eligible voters for a national 
referendum at 18 or over in principle (at 20 or over in the 
transitional period); and (2) put the law into effect three years 
after the promulgation and during this period freeze deliberations 
on amending the Constitutions at a constitutional review panel to be 
set up in the Diet. 
 
In the meeting yesterday, LDP member Hajime Funada presented nine 
revisions laid out by the ruling parties. 
 
Minshuto member Yukio Edano replied that the party will agree on 
five of them, saying: "Although Minshuto has called for 
implementation after a period of two years, the party will agree on 
the ruling camp's call for a period of three years." Edano also 
indicated a willingness to look into the remaining four proposals in 
a positive manner, adding, "If possible, I expect the bill to be 
enacted by Constitution Day on May 5 of next year." A decision was 
also made to continue deliberations on both plans of the ruling 
party and Minshuto. The three parties will soon start discussion on 
provisions, with the aim of enacting the bill in the ordinary 
session next year. 
 
14) Bill amending Basic Education Law to be enacted today, first 
revision in 59 years 
 
YOMIURI (Top Play) (Abridged slightly) 
 
TOKYO 00006979  010 OF 012 
 
 
December 15, 2006 
 
A bill to amend the Basic Education Law, the most important piece of 
legislation this session for Prime Minister Shinzo Abe, yesterday 
passed the House of Councillors Special Committee on the Basic 
Education Law with the approval of a majority of committee members 
from the two ruling Liberal Democratic Party (LDP) and its coalition 
partner, New Komeito. The ruling coalition plans to have the bill 
approved at today's Upper House plenary session and enacted. 
Meanwhile, four opposition parties, including Minshuto (Democratic 
Party of Japan), agreed last night to prevent the legislation from 
passing the Diet by submitting today a no-confidence motion against 
the Abe cabinet. The ruling camp is considering a minor extension of 
the current Diet session, which ends on Dec. 15, unless the 
opposition changes its hard-line stance. This would be the first 
change in the Basic Education Law since it was enacted in 1947. 
 
The special committee held yesterday morning a question-and-answer 
session with attendance of Prime Minister Abe. Following a break, it 
resumed the session on the evening in which opposition parties 
raised questions. After that, the ruling coalition submitted calling 
for a vote on the bill. The bill was adopted while opposition 
lawmakers were opposing taking a vote, gathering themselves around 
Committee Chairman Hirofumi Nakasone. 
 
The four opposition parties -- Minshuto, the Japanese Communist 
Party, the Social Democratic Party, and the People's New Party -- 
discussed last night their response in meetings their secretaries 
general and Diet affairs committee chairmen. As a result, the four 
parties agreed to submit a no-confidence motion against the cabinet 
to the speaker of the House of Representatives on the morning of 
Dec. 15. They also agreed to submit to the president of the House of 
Councillors a no-confidence motion against the prime minister. 
 
In an effort to prepare for the passage of the education reform bill 
and other key measures, the ruling parties have started looking into 
the possibility of extending the ongoing session. Abe will meet this 
morning with the secretaries general and Diet affairs chiefs of the 
LDP Upper and Lower Houses to make a final decision on how many days 
the session should be extended. 
 
Since the Finance Ministry will unofficially announce a draft budget 
for fiscal 2007 on Dec. 20, the session will likely be extended 
three to four days. 
 
If the session is extended, the ruling party will reject the 
opposition's motion after approving the Diet extension at the Lower 
House plenary session this afternoon. If the opposition submits to 
the Upper House a no-confidence motion against a cabinet minister, 
the ruling coalition will kill it. The ruling coalition intends to 
pass the education reform bill and other bills into law before the 
end of the 15th. Depending on a move by the opposition, the passage 
of these bills may be delayed to the early hours of the 16th. 
 
15) Opposition bloc to submit no-confident motion against Abe 
cabinet; Ruling camp ready to extend Diet session 
 
NIHON KEIZAI (Page 1) (Full) 
December 15, 2006 
 
The House of Councillors' special committee yesterday approved a 
bill amending the Fundamental Law of Education by a majority from 
 
TOKYO 00006979  011 OF 012 
 
 
the ruling parties. The Abe administration has defined the bill as 
the most important one in the current Diet session. The government 
and the ruling coalition intends to pass the bill into law at the 
plenary session of the Upper House on Dec. 15, the last day of the 
current session. In reaction to the forcible voting, four opposition 
parties agreed to submit a no-confidence motion against the Abe 
Cabinet. The ruling bloc intends to extend the current Diet session 
for about three days. 
 
As the reason for submitting a non-confidence motion, the opposition 
bloc said, "The government wasted tax money for stage-managing town 
meetings." The opposition parties are also studying a submission of 
a censure motion to the Upper House against the prime minister. The 
ruling camp stressed, "Full deliberations were conducted," but the 
opposition side opposed taking a vote, calling for intensive 
deliberations on the town meeting fiasco. 
 
Based on the judgment that it would be difficult to persuade the 
opposition camp, the government and the ruling coalition presented a 
motion for suspending the interpretation session. Surrounded by 
opposition members, Chairman Hirofumi Nakasone declared that the 
bill was adopted. 
 
After the voting, Prime Minister Shinzo Abe told reporters, 
"(Revising the law) is my long-cherished wish and a key task for the 
cabinet, so it was really good." 
 
The bill includes "patriotism-oriented education," using this 
expression, "cultivate a mind that loves the nation and homeland." 
It also stipulates such concepts as "life-long learning" and "home 
education." The education law has not been revised since 1947. 
 
16) Companies to get tax break worth 450 billion yen: Ruling 
parties' tax code revision outline attaches importance to growth; 
Capital investment encouraged; Individual tax payers' burden to 
increase due to abolition of fixed-rate tax break 
 
NIHON KEIZAI (Page 1) (Excerpts) 
December 15, 2006 
 
The ruling parties yesterday outlined tax code revisions for the 
fiscal 2007. The outline features a reduction in corporate tax 
burdens. In order to encourage companies to make capital investment, 
the write-off system will be revised so that companies can report 
the entire amount they used for investment as a loss. The aim is to 
back the economic growth policy advocated by Prime Minister Abe on 
the tax system front. The decision this time will lead to a 
reduction of 450 billion yen in the corporate tax in the fiscal 
¶2007. However, if about more than 1 trillion yen squeezed from the 
abolition of the fixed-rate cut in the income tax as decided last 
year is taken into account, taxes for the next fiscal year will be 
increased. Debate on a consumption tax hike and a reduction in the 
effective tax rate imposed on companies, which is said to be higher, 
compared with foreign countries, has been put off. 
 
The government last year decided to abolish the fixed-rate tax 
break, which reduces the income tax and local tax individual 
taxpayers pay up to 290,000 yen. If over 1 trillion yen squeezed 
from this measure is taken into account, the tax burden of 
individual taxpayers and companies will increase. 
 
 
 
TOKYO 00006979  012 OF 012 
 
 
SCHIEFFER