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UNCLAS SECTION 01 OF 10 TOKYO 005648 
 
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:  DAILY SUMMARY OF JAPANESE PRESS 12/21/07 
 
 
INDEX: 
(1) Poll on Fukuda cabinet, political parties, MSDF Indian Ocean 
refueling mission (Tokyo Shimbun) 
 
(2) Government expects resumption of summit diplomacy under South 
Korean president-elect Lee (Nikkei) 
 
(3) Discord in three opposition parties; People's New Party rejects 
meeting of secretaries general (Yomiuri) 
 
(4) U.S. military ignores primary school in Futenma masterplan 
(Okinawa Times) 
 
(5) Goal set under Kyoto Protocol to be achieved, according to 
implementation program: More than 35 million tons of greenhouse gas 
emissions to be cut through corporate efforts and "cool-biz" 
campaign (Nikkei) 
 
(6) Interviews with Defense Minister Ishiba and military analyst 
Ogawa on defense equipment procurement (Mainichi) 
 
(7) Editorial: Fukuda budget falls short on fiscal reform (Nikkei) 
 
ARTICLES: 
 
(1)Poll on Fukuda cabinet, political parties, MSDF Indian Ocean 
refueling mission 
 
TOKYO (Page 2) (Abridged) 
December 17, 2007 
 
Questions & Answers 
(Figures shown in percentage. Parentheses denote the results of the 
last survey conducted Nov. 5-6.) 
 
Q: Do you support the Fukuda cabinet? 
 
Yes 35.3 (47.0) 
No 47.6 (36.6) 
Don't know (D/K) + no answer (N/A) 17.1 (16.4) 
 
Q: (Only for those who answered "yes" to the previous question) 
What's the primary reason for your approval of the Fukuda cabinet? 
Pick only one from among those listed below. 
 
The prime minister is trustworthy 22.9 (23.7) 
Because it's a coalition cabinet of the Liberal Democratic Party and 
the New Komeito 7.5 (5.9) 
The prime minister has leadership ability 4.4 (5.3) 
Something can be expected of its economic policies 3.2 (1.8) 
Something can be expected of its foreign policies 5.9 (5.0) 
Something can be expected of its political reforms 2.3 (3.7) 
Something can be expected of its tax reforms 1.9 (3.6) 
Something can be expected of its administrative reforms 2.4 (2.9) 
There's no other appropriate person (for prime minister) 46.6 
(42.3) 
Other answers (O/A) 0.9 (2.4) 
D/K+N/A 2.0 (3.4) 
 
Q: (Only for those who answered "no" to the first question) What's 
the primary reason for your disapproval of the Fukuda cabinet? Pick 
only one from among those listed below. 
 
TOKYO 00005648  002 OF 010 
 
 
 
The prime minister is untrustworthy 12.5 (9.6) 
Because it's a coalition cabinet of the Liberal Democratic Party and 
the New Komeito 8.4 (13.0) 
The prime minister lacks leadership ability 16.5 (8.4) 
Nothing can be expected of its economic policies 21.6 (19.5) 
Nothing can be expected of its foreign policies 2.7 (2.4) 
Nothing can be expected of its political reforms 13.5 (11.1) 
Nothing can be expected of its tax reforms 8.4 (10.6) 
Nothing can be expected of its administrative reforms 8.7 (12.0) 
Don't like the prime minister's personal character 5.2 (6.7) 
O/A 1.7 (4.6) 
D/K+N/A 0.8 (2.1) 
 
Q: The government has introduced a new antiterror bill to the Diet 
to replace the Antiterrorism Special Measures Law that expired in 
November, and the Diet is now deliberating on the bill. This 
legislation is for the Maritime Self-Defense Force to back up U.S. 
and other foreign naval vessels in the Indian Ocean with fuel and 
water supply for a period of one year. The bill this time does not 
require the government to ask the Diet for its approval of MSDF 
activities there. Do you support this legislation? 
 
Yes 38.8 
No 46.7 
D/K+N/A 14.5 
 
 
Q: The ruling coalition of the Liberal Democratic Party and New 
Komeito intends to revote on the new antiterror bill in the House of 
Representatives to enact it into law with a majority of two-thirds 
or more if the bill is voted down in the House of Councillors. Do 
you think the House of Representatives should revote on this 
legislation to enact it into law? 
 
Yes 41.2 
No 43.6 
D/K+N/A 15.2 
 
Q: (Only for those who answered "no" to the foregoing question) Why? 
(One choice only) 
 
Because there's no need for refueling activities 36.8 
Because it would be better to respect the House of Councillors' 
decision 35.1 
Because it would be better to avoid overriding the House of 
Councillors' decision 19.6 
O/A 3.0 
D/K+N/A 5.5 
 
Q: Would you like the current LDP-led coalition to remain in office, 
or would you otherwise like it to be replaced with a coalition 
centering on the Democratic Party of Japan (Minshuto)? 
 
LDP-led government 28.5 (40.7) 
DPJ-led government 44.7 (35.5) 
D/K+N/A 26.8 (23.8) 
 
Q: The current House of Representatives membership is up until 
September 2009. When would you like the next election to take place 
for the House of Representatives? 
 
 
TOKYO 00005648  003 OF 010 
 
 
Within the year 3.1 (11.0) 
During the first half of next year 47.0 (45.5) 
During the latter half of next year 26.0 (20.6) 
The year after next 12.8 (12.1) 
D/K+N/A 11.1 (10.8) 
 
Q: Which political party do you support? 
 
Liberal Democratic Party (LDP) 25.2 (38.2) 
Democratic Party of Japan (DPJ or Minshuto) 28.5 (27.5) 
New Komeito (NK) 3.1 (3.6) 
Japanese Communist Party (JCP) 3.6 (3.3) 
Social Democratic Party (SDP or Shaminto) 1.5 (1.9) 
People's New Party (PNP or Kokumin Shinto) 0.3 (0.4) 
New Party Nippon (NPN or Shinto Nippon) 0.2 (0.1) 
Other political parties, groups --- (---) 
None 36.0 (23.5) 
D/K+N/A 1.6 (1.5) 
 
Polling methodology: The survey was conducted across the nation on 
Dec. 15-16 by Kyodo News Service on a computer-aided random digit 
dialing (RDD) basis. Among randomly generated telephone numbers, 
those actually for household use with one or more eligible voters 
totaled 1,477. Answers were obtained from 1,033 persons. 
 
(2) Government expects resumption of summit diplomacy under South 
Korean president-elect Lee 
 
NIKKEI (Page 2) (Full) 
December 20, 2007 
 
The Japanese government welcomes the victory of Lee Myung Bak in the 
presidential election in South Korea. The government anticipates 
that the inauguration of the Lee administration will give a good 
chance for Japan and South Korea to resume "shuttle diplomacy" 
through reciprocal visits between the two leaders and to strengthen 
bilateral ties in wide areas, including negotiations on a free trade 
agreement (FTA). The FTA negotiations have been suspended under the 
incumbent administration of Roh Moo-hyun. The government will 
carefully watch what approaches the new South Korean government will 
make to issues with North Korea and Japan's wartime past. 
 
In a press conference yesterday, Chief Cabinet Secretary Nobutaka 
Machimura said: "I expect Mr. Lee will exert leadership so that 
relations between Japan and South Korea will be improved further." 
 
The Grand National Party, to which Lee belongs, is a conservative 
party that led the South Korean political world until 10 years ago. 
In the party, there are more persons knowledgeable about Japan than 
in the governing Uri Party, which its members call an open party. 
The party has adopted an economic policy that gives priority to 
growth, as well as a diplomatic approach based on the framework of 
cooperation between Japan, the U.S., and South Korea, similar to 
Japan's policy stance. 
 
The political method taken by Lee, who comes from the business 
world, is viewed as pragmatic. The Japanese government expects the 
new government will draw a line with the foreign policy by President 
Roh based on "a concept" or "sentiment." 
 
When Lee visited Japan in November last year, the Japanese 
government cordially treated him in his meeting with then Prime 
 
TOKYO 00005648  004 OF 010 
 
 
Minister Abe in anticipation of his cooperation after the 
presidential election. A senior government official said: "Japan and 
South Korea will be able to bring their bilateral ties back to 
normal." 
 
President Roh, who regarded "the settlement of past accounts" as the 
"top priority issue" pending between the two countries, severely 
criticized Prime Minister Junichiro Koizumi's visits to Yasukuni 
Shrine and Japan's stance on the issue of title over the 
Takeshima/Dokdo islets. During the administration of Prime Minister 
Abe, Roh expressed a sense of alarm toward Japan's views of history 
and its hard-line policy toward North Korea. Under such a situation, 
reciprocal visits to each other's countries by the two leaders have 
been suspended since June 2005. 
 
Prime Minister Fukuda's policy of prioritizing Asia has been hailed 
in South Korea, with a government source saying, "Both conservatives 
and liberals have taken it favorably." Diplomats of the two 
countries aim to revive shuttle diplomacy with Prime Minister 
Fukuda's attendance to the presidential inaugural ceremony in Seoul 
next February and an early visit to Japan by the new president. 
 
Even so, Lee is not fully on board regarding Japan's views of 
history and its stance on the Takeshima/Dokdo islands. Keeping the 
general election in South Korea slated for next April in mind, Lee 
wants to avoid giving an image that he is weak-kneed toward Japan. A 
senior Foreign Ministry official points out that the fact that he 
was born in Japan might prompt him to take a tough stance toward 
Japan for the domestic audience. 
 
Lee is positive about economic cooperation with North Korea to urge 
the nation for reform and market opening but attaches the 
precondition that the North gets rid of its nuclear programs and 
weapons. Lee told Liberal Democratic Party member Koichi Kato and 
others when they visited South Korea in April: "Japan's extremely 
strong attitude on the abduction issue might undermine our efforts 
to resolve the North's nuclear issue." It remains to be seen to what 
extent Lee will be able to take joint steps with Japan. 
 
(3) Discord in three opposition parties; People's New Party rejects 
meeting of secretaries general 
 
YOMIURI (Page 4) (Full) 
December 21, 2007 
 
Cooperation among opposition parties for the next House of 
Representatives has not gone well. Although the Democratic Party of 
Japan (DPJ or Minshuto), the Social Democratic Party (SDP), and the 
People's New Party (PNP) had planned to hold a meeting on Dec. 20 of 
their secretaries general, the meeting was cancelled at the request 
of the PNP. The three parties had also planned to announce that they 
would cooperation in about 10 single-seat constituencies. DPJ 
Secretary General Yukio Hatoyama and his SDP counterpart Seiji 
 
SIPDIS 
Mataichi confirmed that they would cooperate in the next Lower House 
election more strongly than that they did in the 2005 election. The 
SDP and PNP seem to have rebuffed the DPJ, which has filed its 
candidates in a proactive manner. 
 
The DPJ started at the end of September cooperation with the SDP and 
PNP. It has pushed ahead with the work in order to determine by the 
end of the year electoral districts where they would cooperate. The 
three parties had generally decided that the DPJ would field no 
 
TOKYO 00005648  005 OF 010 
 
 
candidates in ten single-seat constituencies since the PNP would 
file seven candidates and the SDP would slate one to two candidates. 
 
 
However, with the DPJ's announcement on Dec. 18 of the names of 
candidates the party has informally decided to field in eight 
single-seat constituencies, including the Tokyo No. 10 district, the 
three opposition parties failed to move closely together. Shizuka 
Kamei of the PNP said: "If a party decides on candidates in a 
unilateral way, we won't be able to maintain cooperative relations." 
So, the PNP proposed an extension of the meeting. 
 
Koki Kobayashi, a postal rebel who ran for the 2005 Lower House 
election as a PNP candidate in the Tokyo No. 10 district, was 
defeated by former Defense Minister Yuriko Koike of the Liberal 
Democratic Party (LDP). The PNP was considering fielding Kobayashi 
in the Tokyo No. 10 district, but the DPJ has decided to run Takako 
Ebata as its candidate. 
 
Although the PNP had asked the DPJ to cooperate for Akihiko 
Kumashiro to run in the Okayama No. 1 district, the DPJ has 
informally decided to file new-face candidate Takashi Takai. 
 
The DPJ recommended SDP candidates for seven single-seat 
constituencies in the 2005 election and 16 electoral districts in 
the 2003 race. However, coordination between the two parties is 
running into difficulties. 
 
In the Tokyo No. 6 and Kanagawa No. 12 districts, incumbent 
lawmakers of the DPJ and SDP will likely run as the two parties have 
informally endorsed them. 
 
The DPJ is also trying to field new candidates in single-seat 
constituencies in which incumbent SDP Lower House members are 
expected to run. Some DPJ members are wary of how election 
cooperation will turn out, with a senior Election Committee member 
saying: "Although we have been making efforts to cooperate in the 
election, we have often faced against each other." 
 
(4) U.S. military ignores primary school in Futenma masterplan 
 
OKINAWA TIMES (Page 2) (Full) 
December 21, 2007 
 
GINOWAN-The U.S. Marine Corps' Futenma Air Station is in the U.S. 
military's air installation compatible use zone (AICUZ), which 
restricts the use of land in the periphery of U.S. military bases. 
Ginowan City's municipal government discovered this fact yesterday 
from a 1992 Futenma airfield masterplan obtained from the United 
States. The masterplan prohibits U.S. military bases to use land in 
contiguous areas up to 900 meters from both ends of their runways. 
In these clear zones, architecture like housing and schools are not 
to be located. Actually, however, Futenma Daini Elementary School is 
located in Futenma airfield's clear zone. "It's a false plan that 
ignored the elementary school's existence and covered up the facts 
about the danger of Futenma airfield," Ginowan Mayor Yoichi Iha said 
in a press conference. The mayor will continue to call for the 
Japanese and U.S. governments to remove the airfield. 
 
AICUZ is a land use guideline intended to protect the safety of base 
neighbors and facilitate aircraft flights. However, the masterplan 
has no description of Futenma Dai-ni Elementary School, which is 
 
TOKYO 00005648  006 OF 010 
 
 
included in the prohibited zone. In fact, aircraft fly over 'no-fly' 
zones. 
 
A group of local residents has instituted a class action lawsuit 
against the government over the danger of Futenma airfield due to 
buzzing aircraft. The focus is on the airfield's danger closing in 
on local communities. "They built a runway at Futenma in the 1970s 
and consolidated its functions as an airfield," Iha said. "But," he 
added, "the elementary school was opened in the 1960s." He also 
said, "The Japanese and U.S. governments knew that there was an 
elementary school there, but they have left the danger as it is." He 
asserted, "Futenma airfield is defective, so it should be removed 
immediately." 
 
Hiromichi Umebayashi, representative of Peace Depot, a nonprofit 
organization, who is familiar with base issues, said: "The 
masterplan does not describe anything about the definition of a 
no-land-use area (to protect local residents), and it only describes 
something like height limits for the safety of aircraft. I guess 
they intentionally did not refer to danger zones. They probably 
created the masterplan the U.S. military wants, and they probably 
want to use the base as they like." 
 
(5) Goal set under Kyoto Protocol to be achieved, according to 
implementation program: More than 35 million tons of greenhouse gas 
emissions to be cut through corporate efforts and "cool-biz" 
campaign 
 
NIKKEI (Page 3) (Almost full) 
December 21, 2007 
 
A draft for a final report that the Ministry of Environment (MOE) 
and the Ministry of Economy, Trade and Industry (METI) have been 
preparing in an effort to achieve the goal of cutting greenhouse gas 
emissions the Kyoto Protocol sets on Japan was revealed on Dec. 20. 
Japan has further reduced emissions of greenhouse gasses thanks to 
the reinforced voluntary action program of business circles and 
national campaigns, such as the "cool-biz" campaign. Their plan is 
to meet the reduction goal by cutting 35 million tons of greenhouse 
gasses (in terms of carbon dioxide = CO2) in total. 
 
MOE and METI will release the draft at their joint deliberation 
meeting to be held on Dec. 21. 
 
The Kyoto Protocol mandates Japan cut the average emissions of 
greenhouse gasses during the fiscal 2008-fiscal 2012 period by 6 
PERCENT  compared with the fiscal 1990 level. According to the 
government estimate, however, even if the present reduction measures 
work well, results would still fall short of between 20 million tons 
and 34 million tons. For this reason, the government has considered 
adopting additional measures at the joint deliberation meeting. 
 
Additional measures include 18-million-ton cuts through a reinforced 
voluntary action program for companies to address greenhouse gas 
emissions cuts, approximately 10 million-ton cuts through revisions 
of such laws as the Energy-Conserving Law and cuts between 67.8 
million tons and 10.50 million tons through national campaigns, such 
as the cool-biz or eco-drive campaigns. More than 35 million tons 
after subtracting overlapped portions of those measures would be 
secured to cover the shortage. 
 
With those specific measures taken into account, the final draft 
 
TOKYO 00005648  007 OF 010 
 
 
notes that the 6 PERCENT  cut goal is achievable. The report, 
however, simply incorporates arguments both for and against the 
introduction of a domestic emissions trading system, based on a cap 
and trade formula setting the upper limit of emissions to be 
observed by companies and allowing them to trade emissions shortage 
or overage according to the cap imposed on them. 
 
Following this final report, the government will adopt at a cabinet 
meeting a revised version of the goal achievement program. However, 
estimated cuts in greenhouse gas emissions based on additional 
measures have the aspect of a tally of numbers. There is a problem 
of whether it is possible to implement those measures themselves. In 
addition, it is not known whether emissions will decrease even if 
all measures are carried out. 
 
In order to realize the emissions reduction program through the 
national campaigns, it is necessary for one person to cut up to 90 
kilograms of greenhouse gas emissions a year. The next barrier to 
clear is high regarding to what extent effects can be produced in 
the household sector. 
 
(6) Interviews with Defense Minister Ishiba and military analyst 
Ogawa on defense equipment procurement 
 
MAINICHI (Page 4) (Abridged slightly) 
December 16, 2007 
 
In the wake of a bribery and corruption case involving a former 
administrative vice-defense minister over the procurement of defense 
equipment, the government held a Ministry of Defense (MOD) reform 
council meeting to discuss ways to secure transparency in defense 
equipment procurement and other matters. Mainichi Shimbun's Ryuko 
Tadokoro asked Defense Minister Shigeru Ishiba and military analyst 
Ogawa about how the procurement system should be reformed. 
 
Defense Minister Shigeru Ishiba -- MOD needs a system through which 
it can directly procure equipment 
 
Japan relies on foreign countries for a considerable portion of 
defense equipment. If all equipment was to be produced domestically, 
given the three principles banning weapons exports, there are limits 
to reducing the cost by means of mass production and the cost 
therefore would swell several times. In terms of price and 
efficiency, importing equipment is necessary. At the same time, 
Western business customs and laws on contracts are really complex. 
This can explain why trading houses with knowledge and experience 
have been involved in the process. 
 
Nevertheless, the uncovered (bill-padding practice) by Yamada Corp. 
is an unpardonable act of fraud. MOD is a victim. The ministry needs 
to have the ability to determine when prices are too high. Prices 
vary according to the difference in wealth between the exporting and 
importing countries, as well as to the importance of security of the 
country. Judging prices requires high ability. 
 
Because the matter also concerns defense policy, there is a need to 
consider a system that will allow MOD to directly procure equipment 
in a manner that does not go against administrative reform. We would 
like to come up with a direction after discussing the matter for a 
year or two instead of a month or two while keeping national 
interests in mind. 
 
 
TOKYO 00005648  008 OF 010 
 
 
In 1998, a breach-of-trust case involving the former Central 
Procurement Office occurred, in which domestic manufacturers played 
a central role. In the latest case of equipment imports, trading 
houses were involved. Lessons learned in the previous case were not 
that helpful. 
 
It is acceptable for retired Self-Defense Force officers to find 
employment at manufacturers or trading firms by utilizing their 
expertise. It is not good, however, for the ministry to award 
(trading houses) contracts in return for hiring so many retired SDF 
officers. In other countries, conventional forces are small because 
retired soldiers join the reserves and enter active service in times 
of contingencies. Such is not the case in Japan. In discussing 
equipment procurement, we should ask if the current system should be 
upheld. 
 
Cozy ties between lawmakers lobbying for defense interests and 
defense contractors have often been pointed out. A lawmaker can say 
such and such a fighter jet is necessary either because he received 
payoffs from a certain company or because he has national security 
in mind. The question is whether such a statement was made in a 
discussion at a public arena. 
 
I do not know any case in which lawmakers conducted such a 
discussion on procurement either at political parties or at the 
Diet. If legislators do not discuss Japan's security environment 
because they cannot understand it, that is abnormal. 
 
Military analyst Kazuhisa Ogawa -- Organization that can spot 
irregularities needed 
 
I would like to propose procedures that are viable. It is not 
possible for MOD and the SDF to have the necessary groups of 
professionals specializing in procurement and R&D overnight. So it 
is rational to let trading houses intervene in procurement for the 
time being while expecting them to play a role in 
information-gathering at the same time. 
 
The ministry needs to quickly form a group of people to check 
irregularities; it does not have to be big. At the same time, let a 
private-sector or semi-governmental group of exerts verify if the 
ministry's checking system is functioning properly. That will be the 
first step. 
 
Saying that because duties are special, a special procurement system 
resulted in malfeasance is an excuse. Although naturally military 
secrets are involved, I believe all offices are basically the same. 
 
SIPDIS 
 
At the root of this problem lies Japan's democracy, which is not 
functioning properly. Japan is void of a high-level organization, 
like the U.S. Government Accountability Office (GAO) that combines 
the functions of account audit and administrative inspection. 
Japan's Board of Audit and the Internal Affairs and Communications 
Ministry Administrative Evaluation Bureau do not have the ability to 
see military strategy. The three principles banning weapons exports 
are partially affecting procurement, but the ministry should not 
complain about it. 
 
There exist collusive ties between MOD/SDF and the defense industry 
with the former, from young retirees to higher-ups, anticipating 
taking cushy jobs at defense firms and the latter expecting 
receiving orders in return. Years ago, a breach-of-trust scandal 
 
TOKYO 00005648  009 OF 010 
 
 
involving the former Central Procurement Office occurred. But the 
case was closed by just tampering with the organization and 
replacing some officials. A sense of intensity is lacking. 
 
It is also serious that domestically produced weapons have flaws. 
Because there is no strategy for the development and procurement of 
weaponry, the operational side is ill-prepared, and the size of the 
Technical Research and Development Institute is too small and the 
level is hardly high. Even if other countries are said to be 
developing specific weapons by looking at 15 years ahead, funds are 
not available unless there are actual weapons. That is because MOD 
does not have the ability to judge invisible information. There is 
no other option but to aim at prototypes developed by other 
countries. The Diet and the media are also inattentive and cannot 
understand the situation properly, and the system has not been 
improved. 
 
The Japan-U.S. alliance has also cast a pall. Japan's R&D and 
procurement of defense equipment has been sacrificed at times by 
trade disputes between Japan and the United States. What was 
necessary has not always been the viewpoint. 
 
(7) Editorial: Fukuda budget falls short on fiscal reform 
 
NIKKEI (Page 2) (Slightly abridged) 
December 21, 2007 
 
The Finance Ministry yesterday announced a draft budget for fiscal 
2008 - the first compiled under Prime Minister Fukuda. The ministry 
has curbed the issuance of new government bonds by 84 billion yen 
from the current fiscal year's level to approximately 25.3 trillion 
yen for the fourth straight annual decline. The draft budget is full 
of stopgap measures that will be effective only in fiscal 2008, out 
of consideration to the ruling camp's call for expanding government 
spending. The supplementary budget for this fiscal year also shows 
slack discipline, falling short on fiscal reconstruction efforts.' 
 
The draft budget totals slightly more than 83 trillion yen and 
allocates approximately 47.28 trillion yen in general expenditures - 
core policy-related outlays, up 0.2 PERCENT  and 0.7 PERCENT , 
respectively. Meanwhile, the ministry plans to slash public works 
spending by 3.1 PERCENT  and outlays for official development 
assistance by 4 PERCENT , in accordance with the five-year 
spending-cut plan set by the Koizumi administration in 2006. 
 
Under the draft budget, annual tax revenues are expected to increase 
only slightly to 53.5 trillion, and the deficit in Japan's primary 
balance is projected to expand 750 billion yen. It will become more 
difficult to meet the government's goal of turning the balance into 
the plus column by fiscal 2011. 
 
A close look at the draft budget reveals that it is full of 
unreasonable tricks, as represented by outlays for social insurance 
programs, which account for 46 PERCENT  of the total general 
expenditure. To meet the target to curb spending by 220 billion yen, 
the ministry plans to slash part of the national burden of 
contribution to the government's health insurance program and levy 
the decreased portion on private-sector health insurance unions. But 
outlays for medical service fees will be raised by 0.38 PERCENT  in 
response to calls by the Japan Medical Association, which has 
enormous political clout. 
 
 
TOKYO 00005648  010 OF 010 
 
 
In the education budget, as well, in response to a call by the 
education-policy clique in the Diet for a significant increase in 
the number of elementary and junior high school teachers under the 
banner of education rebuilding, the Finance Ministry has decided to 
increase the number of part-time teachers. In the medical service 
and education sectors, discussion on "quality" has been left 
behind. 
 
Tax grants to local governments will be increased by 4.6 PERCENT , 
affected by the 400 billion yen set aside to finance measures to 
narrow the revenue disparity between urban and rural areas. This 
policy is apparently aimed to woo support in the next House of 
Representatives election. 
 
The draft budget proposes reducing outlays for the agriculture, 
forestry and fisheries sectors by 70 billion yen, but 80 billion yen 
has been earmarked as outlays for promptly revitalizing agriculture 
in the supplementary budget for this fiscal year. It has been 
decided to freeze a plan to raise the burden of medical service 
payment by elderly patients, but the financial source to cover that 
portion also will depend on the supplementary budget. 
 
The Finance Ministry racked its brains over how to curb the issuance 
of new government bonds in an effort to underscore a 
"reform-oriented budget." But the small reduction in government bond 
issuance will be promptly offset according to changes in the 
economic situation and interest rates. 
 
The ministry proposes disbursing nearly 10 trillion yen from the 
reserves in the special account for public investment and loans to 
reduce public debts, the outstanding government bonds will increase 
to 553 trillion yen. 
 
DONOVAN