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UNCLAS SECTION 01 OF 11 TOKYO 001588 
 
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 06/11/08 
 
Index: 
 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
4) LDP and New Komeito approve extensions of SDF dispatches to 
Indian Ocean and Iraq  (Mainichi) 
 
5) Amended child-pornography bill being presented to the Lower House 
but likely to be carried over until the next session  (Mainichi) 
 
North Korea problem: 
6) Japan aiming at progress on the abduction front as talks with 
North Korea restart today  (Nikkei) 
7) Foreign Minister Koumura says if progress achieved on abduction 
issue with North Korea, Japan would consider something in return 
(Asahi) 
8) North Korea lets out the word that it expects Japan to pay 4.2 
billion yen in energy money in return for its denuclearization 
(Asahi) 
9) Under Secretary of State Burns in Tokyo says he hopes to see 
results in Japan-DPRK talks  (Nikkei) 
 
10) Japanese government seeking international recognition of an 
extension of its ocean shelf, the aim being to exploit natural 
resources in that sea area  (Yomiuri)    7 
 
Diet affairs: 
11) Diet being extended to June 21 in order to ratify crucial EPA 
with ASEAN  (Tokyo Shimbun) 
12) Democratic Party of Japan's (DPJ) to submit a censure motion 
against Prime Minister Fukuda today but atmosphere in the Diet lacks 
tension  (Tokyo Shimbun) 
13) DPJ head Ozawa is starting to hear criticism from his own party 
for his unrelenting confrontational mode against the ruling camp 
(Yomiuri) 
14) Ruling parties approve revisions to the controversial medical 
system for the elderly that are hoped to assuage public opinion 
(Tokyo Shimbun) 
15) DPJ to put off resolution of the pending appointment of a top 
BOJ official, making it likely that the post will be indefinitely 
empty  (Nikkei) 
16) Economic policy guidelines: Prime Minister Fukuda firm on 
expediting reforms, will not allow "sacred areas" to exist in social 
security expenditures  (Mainichi) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Government to provide 1,070,000 households on welfare with 
terrestrial digital tuner 
 
Mainichi: 
Mass murder in Akihabara: Suspect Kato told he would be fired 9 days 
before incident 
 
Yomiuri: 
Supreme Court's first ruling that there is no need to pay original 
 
TOKYO 00001588  002 OF 011 
 
 
principal to loan sharks deals blow to them 
 
Nikkei: 
Government to set four conditions not to impose corporate tax with 
the aim of promoting foreign investment in Japan 
 
Sankei: 
Government and ruling bloc expected to adopt the ruling bloc's 
project team's proposal to make automatic deduction of premium for 
the medical system for elderly optional in the case of pension being 
below 1.8 million yen 
 
Tokyo Shimbun: 
Mass murder in Akihabara: Suspect Kato confesses discontent with his 
life 
 
Akahata: 
Government gives up on making final appeal against lawsuit by 
atomic-bomb victims 
 
2) EDITORIALS 
 
Asahi: 
(1) Hillary Clinton withdraws from Democratic primary race: When 
will the glass ceiling collapse? 
(2) Swimmers now may wear new Speedo LZR Racer swimsuit at Beijing 
Olympics: Swimmers should be able to display their ability to the 
full 
 
Mainichi: 
(1) New criteria necessary to provide relief to many more 
atomic-bomb victims 
(2) Flood disaster summit: Reduce disasters with regional 
cooperation 
 
Yomiuri: 
(1) Lawsuit by atomic-bomb victims: Government needs to use high 
court's decisions when recognizing atomic-bomb survivors 
(2) Japanese swimsuit companies fall behind Speedo in development of 
new products 
 
Nikkei: 
(1) Measures against soaring oil prices now bring up monetary issue 
(2) Hokkaido is best place for adoption of daylight saving time 
 
Sankei: 
(1) One month after Sichuan earthquake: Information reveals the 
shortest way to recovery 
(2) Conditions to fight world rivals now set as Japanese swimmers 
allowed to wear Speedo's LZR Race swimsuit in Beijing Olympics 
 
Tokyo Shimbun: 
(1) Fukuda vision on climate change needs to be modified 
(2) Political turmoil in ROK: Pragmatism needed for the public's 
sake 
 
Akahata: 
(1) Fukuda vision on climate change: It's folly to use the setting 
of targets as a bargaining chip 
 
3) Prime Minister's Official Residence (Kantei) 
 
 
TOKYO 00001588  003 OF 011 
 
 
Prime Minister's schedule, June 10 
 
NIKKEI (Page 2) (Full) 
June 11, 2008 
 
08:52 
Attended a cabinet meeting. 
 
09:19 
Met MAFF Minister Wakabayashi and Chief Cabinet Secretary Machimura, 
followed by Justice Minister Hatoyama, MHLW Minister Masuzoe, and 
Machimura. Masuzoe and Machimura stayed on. Afterward met National 
Public Safety Commission Chairman Izumi. 
 
09:51 
Met U.S. Ambassador to Japan Schieffer and his wife at the Kantei. 
 
11:00 
Met Science Council of Japan Chairman Kanazawa and Vice Chairman Doi 
in the presence of Science and Technology Minister Kishida, Cabinet 
special adviser Kurokawa, and others. Afterward met Economic and 
Fiscal Policy Minister Ota in the presence of Assistant Chief 
Cabinet Secretary Saka. Ota stayed on. 
 
12:18 
Had lunch with LDP third-term members in the presence of Deputy 
Chief Cabinet Secretary Ono, joined by Machimura. 
 
14:10 
Met Cabinet Intelligence Director General Mitani, followed by Lower 
House National Basic Policy Committee Chairman Eto and principal 
director Hagiyama, followed by Vice Foreign Minister Yabunaka Asian 
and Oceanian Affairs Bureau Director General Saiki. Yabunaka stayed 
on. 
 
15:30 
Met New Komeito head Ota, LDP Secretary General Ibuki, New Komeito 
Secretary General Kitagawa in the presence of Machimura. 
 
16:05 
Met assistant Ito. Later attended a CEFP meeting. 
 
18:13 
Met Prime Minister Vanhanen of Finland, followed by a joint press 
conference. 
 
19:03 
Hosted a dinner party. 
 
20:24 
Returned to his official residence. 
 
4) Ruling parties OK extending SDF missions in Iraq, Indian Ocean 
 
MAINICHI (Page 5) (Full) 
June 11, 2008 
 
The ruling Liberal Democratic Party and its coalition partner, New 
Komeito, approved the government's plans yesterday to extend the 
Maritime Self-Defense Force's refueling mission in the Indian Ocean 
until Jan. 15 next year and the Air Self-Defense Force's airlifting 
mission in Iraq until the end of July next year. Prime Minister 
 
TOKYO 00001588  004 OF 011 
 
 
Yasuo Fukuda's cabinet is expected to endorse the plans on June 13. 
 
The Iraq Special Measures Law and the Antiterrorism Special Measures 
Law, under which the MSDF and the ASDF are on their respective 
missions, are set to run out when the plans expire. There is no 
change in the ASDF and MSDF activities. 
 
5) Ruling bloc submits bill amending child pornography law to Lower 
House; Continued deliberations eyed 
 
MAINICHI (Page 2) (Full) 
June 11, 2008 
 
The Liberal Democratic Party and its coalition partner New Komeito 
yesterday submitted to the House of Representatives a 
lawmaker-initiated bill amending the Law for Punishing Acts Related 
to Child Prostitution and Child Pornography designed chiefly to ban 
the simple possession of child pornography. With the close of the 
current Diet session only days away, the two parties plan to carry 
deliberation on the bill to the next extraordinary Diet session in 
the fall to aim at its enactment in that session after holding talks 
with opposition parties. The ruling bloc's plan is designed to 
totally ban the simple possession of child pornography, saying, 
"Child pornography must not be possessed at will." Meanwhile, the 
major opposition Democratic Party of Japan's plan is intended to ban 
only cases in which child pornography is obtained in exchange for 
remunerations. Twists and turns are expected before a settlement 
line is reached. 
 
6) Japan-North Korea formal talks start today: Japan aims at moving 
abduction issue forward 
 
NIKKEI (Page 2) (Full) 
June 11, 2008 
 
Japan and North Korea will hold a two-day formal meeting in Beijing, 
starting today. Full-fledged talks will be the first since the 
second round of the working group meeting on Japan-North Korea 
normalization held in Ulan Bator under the six party talks in 
September last year.  Japan wants to pave the way for achieving a 
tangible progress on the abduction issue. However, North Korea's 
response is unclear. 
 
The meeting will bring together Akitaka Saiki, director general of 
the Foreign Ministry Asian and Oceanian Affairs Bureau, and 
Ambassador Song Il Ho in charge of normalization talks with Japan 
from North Korea. Talks will be held on the afternoon of the 11th 
and all day on the 12th.  A dinner meeting is also scheduled for the 
evening of the 11th. 
 
Foreign Minister Koumura during a press briefing on the 10th said, 
"If the North Korean side takes a concrete action, taking a big step 
forward, then we will also take a concrete action, taking a big step 
forward."  He thus indicated the government's stance of taking a 
forward-looking measure, if there is a tangible progress over the 
abduction issue. 
 
7) Something likely in return for progress on abductions: Koumura 
 
ASAHI (Page 4) (Full) 
June 11, 2008 
 
 
TOKYO 00001588  005 OF 011 
 
 
Japan and North Korea will hold a formal meeting of working-level 
officials from their foreign ministries in Beijing on June 11-12 to 
discuss their matters of concern, including abductions and past 
issues. Attention will focus on how North Korea will respond to 
Japan's call for specific progress on the pending issue of Japanese 
abductees. 
 
Japan and North Korea have held no formal talks since their working 
groups met in September last year on diplomatic normalization. 
Following an informal meeting held on June 7, the formal meeting 
this time will be held with the participation of the Foreign 
Ministry's Asian and Oceanian Affairs Bureau Director General 
Akitaka Saiki from Japan and Song Il Ho, ambassador for negotiations 
over the normalization of diplomatic relations between North Korea 
and Japan, from North Korea. 
 
Foreign Minister Koumura, meeting the press yesterday, indicated 
that Japan would consider something in return, such as easing 
Japan's sanctions, depending on progress on the abductions issue. 
"If they take a big step forward, we will also take a big step 
forward for specific action. 
 
According to informed sources, North Korea may offer to turn over 
Japan Airlines hijackers. The United States cites this issue as one 
of its reasons for listing North Korea as a state sponsor of 
terrorism. Tokyo's Metropolitan Police Department has placed one of 
the hijackers on Interpol's international wanted list on suspicion 
of abducting Keiko Arimoto. 
 
North Korea could bring up the hijackers issue as a possible card 
that can move its relations with Japan and the United States forward 
at the same time. Pyongyang wants Tokyo to ease Japan's sanctions on 
North Korea, gain ground for Japan's humanitarian aid, and dodge 
Japan's pursuit of North Korea over the abductions issue. However, 
Koumura says turning over the hijackers can hardly be called 
progress on the abductions issue. 
 
8) N. Korea demands 4.2 billion yen from Japan in return for 
denuclearization 
 
ASAHI (Page 11) (Abridged) 
June 11, 2008 
 
SEOUL-North Korea is calling for an anthracite coal gasification 
facility to be constructed as economic and energy aid in return for 
its denuclearization steps, South Korean government officials 
revealed yesterday. North Korea wants Japan to shoulder 40 million 
dollars (approx. 4.2 billion yen) to share the cost of 
construction. 
 
On June 5, an economic and energy working group for the six-party 
talks met at Panmunjom, with North and South Korean representatives 
attending. On that occasion, North Korea made the request. North 
Korea will ask China to construct the facility, according to the 
officials. 
 
North Korea is now in the process of disabling its nuclear-related 
facilities. In return, North Korea is to be aided with fuel oil 
amounting to 1 million tons. However, the Japanese government does 
not take part in this aid, taking the position that there is no 
progress on the issue of Japanese abductees. South Korea and other 
six-party members are calling on Japan to take part in this aid 
 
TOKYO 00001588  006 OF 011 
 
 
program at an early date. North Korea is believed to have singled 
Japan out in an aim to shake it down. 
 
9) U.S. Under Secretary of State Burns hopes Japan-North Korea talks 
will produce results 
 
NIKKEI (Page 2) (Full) 
June 11, 2008 
 
Referring to formal Japan-North Korea talks to be held in Beijing, 
starting from June 11, visiting Under Secretary of State for 
Political Affairs Burns noted, "I hope the talks will produce a 
definite result." Regarding the issue of the U.S. delisting North 
Korea from its list of state sponsors of terrorism, the issue in the 
spotlight, Burns underscored the U.S. stance that it would reach a 
final decision, based on its law, depending on progress on North 
Korea's nuclear issue. 
 
10) Japan to apply for extending its continental shelf to CLCS with 
aim of gaining right to resource exploitation 
 
YOMIURI (Page 2) (Full) 
June 11, 2008 
 
The government decided to apply to the United Nations Commission on 
the Limits of the Continental Shelf (CLCS) to approve adding 380,000 
square meters to Japan's continental shelf. This decision was 
revealed by a secretariat staffer at the first session yesterday of 
the government's Headquarters for Ocean Policy's demarcation team. 
 
It has been confirmed that there are such ocean floor resources as 
methane hydrate, which is drawing attention as an alternative energy 
for oil, sea-floor hydrothermal deposit, and manganese nodule in the 
sea-floor around Japan. If the CLCS approves Japan's additional 
continental shelf, Japan can claim that it has the right to develop 
such resources. 
 
Japan will make an application in accordance with the UN Convention 
on the Law of the Sea, which took effect in 1994. The convention 
states that the sea-floor within 200 nautical miles (approximately 
370 kilometers) from each country's shore as its continental shelf 
and allows each country to exploit ocean floor resources in that 
zone. Furthermore, the convention stipulates that if each country's 
territory is scientifically proved to be contiguous to ocean floor, 
that country can extend its continental shelf up to 350 nautical 
miles (approximately 650 kilometers). 
 
The government has continued a full survey since 2004 and is 
scheduled to complete it by the end of this month. As a result of 
the survey, the government has judged it can apply for the 
Shikoku-Philippine Basin and the eastward area of the Bonin Islands 
as additional continental shelves of Japan. Japan will submit a 
survey result to the CLCS by next January. The 380,000 square meters 
of continental shelf is almost equal to the Japan's land area. 
 
11) Fukuda decides to extend Diet session for short period out of 
desire to ensure passage of EPA with ASEAN 
 
TOKYO SHIMBUN (Page 2) (Excerpts) 
June 11, 2008 
 
The ruling coalition decided yesterday to extend the current Diet 
 
TOKYO 00001588  007 OF 011 
 
 
session by six days. The decision stems from Prime Minister Yasuo 
Fukuda's strong desire to ensure parliamentary approval for an 
economic partnership agreement (EPA) reached between Japan and the 
Association of Southeast Asian Nations (ASEAN). 
 
Speaking before reporters at the Kantei last evening, Fukuda 
emphasized: "The EPA with ASEAN must be passed somehow. I have asked 
for an extension of the session." 
 
After the ruling coalition adopted a bill governing the special tax 
revenues for highway construction and maintenance by taking an 
override vote in the House of Representatives, both the ruling and 
opposition camps agreed in the Lower House on the bills and treaties 
that had been sent to the House of Councillors. Given this, the 
ruling coalition was optimistic about the situation in the last 
phase of the current Diet session. 
 
However, the Democratic Party of Japan (DPJ) insisted that it would 
not respond to deliberations unless the government promises to 
summon Naoki Akiyama, executive director of the Japan-U.S. Center 
for Peace and Cultural Exchange, a Tokyo-based organization, to 
appear as a sworn witness in an Upper House's Foreign Affairs and 
Defense Committee meeting. But since the ruling coalition rejected 
this demand, the planned meeting was not held. 
 
The government and the ruling coalition had no intention to extend 
the current Diet session, based on the judgment that an extension 
would result in increasing opportunities for the opposition bloc, 
which has control of the Upper House, to pursue the government. 
 
But if the session is extended for a short period, the EPA will be 
automatically approved on the 21st under the relevant rule in the 
Constitution. In a case in which the agreement is scrapped without 
an extension of the session, the government will resubmit it to the 
extraordinary Diet session to be convened in August. Should the EPA 
not be approved by the end of this year as a result of the DPJ's 
attempt to prolong deliberations, the effectuation of the agreement 
on tariffs with Malaysia and Indonesia will be delayed one year. 
 
12) DPJ to submit censure motion today to play up confrontational 
stance, but lack of tension with about-face from cooperative 
attitude on bills related to people's livelihood 
 
TOKYO SHIMBUN (Page 2) (Full) 
June 11, 2008 
 
The Democratic Party of Japan (DPJ) yesterday made final 
preparations to submit a censure motion against Prime Minister 
Fukuda to the House of Councillors today. If the motion is adopted, 
it will be the first resolution against the prime minister under the 
Constitution. Despite such a situation, an atmosphere of tension has 
not built up in the main opposition party in part because the 
process of handling the bills agreed on in talks with the ruling 
coalition has been speedily moving ahead. 
 
The DPJ decided yesterday to leave a decision on what to do about a 
censure motion entirely to President Ichiro Ozawa and other 
executive members. Secretary General Yukio Hatoyama emphasized in a 
street-corner speech in Yurakucho, Tokyo: 
 
"Unless Prime Minister Fukuda promises to abolish the health 
insurance system for people aged 75 or older, we would like to 
 
TOKYO 00001588  008 OF 011 
 
 
submit and adopt a censure motion. This will be the greatest 
opportunity for us to change the trend of politics." 
 
DPJ Diet Affairs Committee Chairman Kenji Yamaoka met with his 
Liberal Democratic Party counterpart Tadamori Oshima and renewed his 
call for his party's agreement on the early abolition of the said 
system. 
 
This approach is aimed to create an environment for the DPJ to 
submit a censure motion, citing the refusal by the government and 
the ruling coalition to scrap the elderly health plan. 
 
In actuality, however, a confrontational mood is not significantly 
growing in the DPJ. That is because the ruling and opposition camps 
in cooperation are stepping up efforts to enact the bills related to 
the people's livelihood in anticipation of a suspension of Diet 
deliberations in the case of a censure motion presented, besides the 
reason that the motion will certainly not serve to prompt the prime 
minister to dissolve the House of Representatives for a snap 
election or to resign his cabinet en masse. 
 
In the Diet session today, dozen bills, including a bill to deal 
with the leprosy problem, are scheduled to be adopted in an Upper 
House plenary session in the morning and then to be submitted in the 
afternoon. Since the DPJ will make a sharp turn from the cooperative 
stance to a confrontational one, a senior party member defined it as 
"a difficult and risky attempt." 
 
For the DPJ, the submission of a censure should have meant to "show 
its willingness to fight seriously with the government," according 
to another senior member. For now, though, its effect remains 
unknown. A party member was overheard saying: "In order to perform 
its duty with clear explanations, our party should respond to calls 
for party-head talks." 
 
13) Ozawa in confrontational mode, but criticism from within his 
party shows that not all are lined up behind him 
 
YOMIURI (Page 4) (Excepts) 
June 11, 2008 
 
Democratic Party of Japan (DPJ) President Ichiro Ozawa's reason for 
having his party submit to the Upper House of Diet today a censure 
motion against the Prime Minister Fukuda is to publicize his 
confrontational stance against the Fukuda administration. However, 
opposition to this move is still smoldering right down to the wire, 
and there are those in the party who point out, like one veteran 
lawmaker who said, "Even if we submit the censure motion, there is 
no sense of uplift from it." 
 
At a meeting of the DPJ standing secretaries yesterday, from which 
Ozawa was absent, being in the regions on a stumping tour, former 
DPJ President Seiji Maehara criticized the DPJ's cancellation of a 
party-heads debate on the 11th, saying, "We should present our 
assertions as a party." Former President Katsuya Okada agreed with 
him. 
 
Japanese Communist Party Secretary General Tadayoshi Ichida at a 
press conference on the 10th also was critical: "A censure motion 
should not filed only under conditions where Lower House dissolution 
and a general election, or a cabinet resignation en masse, are 
unavoidable." He approved filing a resolution, but would not reject 
 
TOKYO 00001588  009 OF 011 
 
 
deliberation even if it were rejected. 
 
14) Health care system: Ruling parties finalize improvement 
measures, including premium payments by pensioners' children 
 
TOKYO SHIMBUN (Page 1) (Full) 
June 11, 2008 
 
The Liberal Democratic Party (LDP) and the New Komeito at a meeting 
yesterday of the ruling parties' project team on the public health 
insurance plan for elderly people aged 75 or older finalized 
measures to improve the system. The government and the ruling 
parties will formally adopt them on the 12th at the earliest. 
 
A cut in the per-capita part of the premiums paid by those whose 
income from public pensions is less 800,000 yen a year -- 2.7 
million persons -- will be reduced from the current 70 PERCENT  to 
90 PERCENT . Premiums imposed in accordance with income levels will 
be reduced about 50 PERCENT  for 900,000 persons who are exempt from 
local taxes with their public pension income between over 1.53 
million yen and about 2.1 million yen. 
 
However, since it is not possible to reform the system to allow a 90 
PERCENT  reduction in relation to the per-capita part of the 
premiums in time, a transitional measure will be taken this fiscal 
year. Under the transitional system, no premiums will be imposed for 
six months starting in October on those whose public pension income 
is less than 1.68 million yen and are eligible for a 70 PERCENT  cut 
in relation to the per-capita part of the premiums, making their 
annual reduction rate 85 PERCENT . There are 4.7 million such 
pensioners. 
 
The current pension deduction system will be maintained, instead of 
an option system between such a system and an over-the-counter 
premium payment system being employed. As an alternative measure, 
credit transfers will be allowed for those who have no records of 
the failure of the payments of national health insurance premiums. 
Premiums of those whose income from public pensions is less than 1.8 
million yen can be deducted from the bank account of kin, such as 
children or a spouse. 
 
Regarding consultation fees for the terminal care of elderly 
patients aged 75 or older, medical fees to be reimbursed to 
hospitals under the medical insurance system in the event a doctor 
or nurses documented their terminal care policy, a necessary step 
will be taken, based on discussion by the Central Social Insurance 
Medical Council. Such a step could include a freeze on the fees. 
 
15) DPJ to forgo taking vote on Ikeo appointment in Upper House; BOJ 
Policy Board seat likely to remain vacant 
 
NIKKEI (Page 5) (Excerpts) 
June 11, 2008 
 
The major opposition Democratic Party of Japan began yesterday 
undertaking final coordination to forgo taking a House of 
Councillors vote in the current Diet session on a plan to appoint 
Keio University Professor Kazuhito Ikeo as a member of the Bank of 
Japan Policy Board. The reason is that the party is being pressed 
for a shift in its decision to endorse the Ikeo plan by the People's 
New Party, which forms a joint parliamentary group in the Upper 
House. As a result, the Policy Board seat might be forced to remain 
 
TOKYO 00001588  010 OF 011 
 
 
vacant a while longer. 
 
The DPJ had decided to endorse the appointment of Ikeo, but the PNP, 
which reversed its previous stance, demanded that the largest 
opposition party, too, withdraw its policy course by brandishing a 
threat of dissolution of the joint parliamentary group, saying that 
Ikeo promoted postal privatization. The DPJ decided at its executive 
meeting yesterday to call off the party's decision and to reconsider 
the matter by leaving it to the party leadership. 
 
The party has already decided to submit a censure motion against 
Prime Minister Yasuo Fukuda to the Upper House. The DPJ has also 
made it clear that if the motion is adopted by the Upper House, it 
will boycott Diet deliberations if the prime minister ignores it. 
Given the situation, the DPJ has decided that taking a vote on the 
Ikeo appointment plan in the Upper House during the ongoing Diet 
session is difficult. 
 
16) Basic policy guidelines determined in outline; Prime minister to 
uphold spending reform without treating social security as 
sacrosanct 
 
MAINICHI (Page 2) (Abridged slightly) 
June 11, 2008 
 
The government's Council on Economic and Fiscal Policy (CEFP), 
chaired by Prime Minister Yasuo Fukuda, yesterday adopted an outline 
showing priority policies for the 2008 basic economic and fiscal 
policy guidelines to be drafted later this month. The outline, 
clearly reflect Fukuda's political identity, aims at freeing up 
road-related tax revenues for general purposes, as well as turning 
Japan into a low-carbon society and making it into a leader in the 
fight against global warming. The outline consists of six items, 
such as strengthening the economy's growth potential; promoting 
administrative and fiscal reforms (moving road-related revenues into 
the general account, carrying out a reform of revenues and 
expenditures, as well as a fundamental reform of the taxation 
system); creating a reliable social security system; and turning 
Japan into a low-carbon society. 
 
The CEFP discussed the target of curbing the growth of social 
security spending to 1.1 trillion yen, specified in the 2006 basic 
policy guidelines. The prime minister indicated that he would uphold 
the framework of reforming the nation's spending, saying, "We will 
not regard social security as a sacred area." In view of public 
criticism of the healthcare system for the elderly and possible 
Lower House dissolution, calls are growing in the government and 
ruling parties for a withdrawal or a review of the target of curbing 
the nation's social security spending. 
 
CEFP private-sector members presented a projection that the 
government would be able to reduce medical spending by a total of 
1.44 trillion yen in the three years up to 2011. As specific 
measures, they pointed out increasing the rate of use of generic 
drugs to 40 PERCENT  on a par with Western levels (880 billion yen); 
shortening the period of hospitalization for examination, and the 
elimination of redundant examinations (410 billion yen); and 
integration or abolition of public hospitals and reduction of 
personnel costs (150 billion yen). Health, Labor and Welfare 
Minister Yoichi Masuzoe already has said that the projection was not 
pragmatic, so coordination might run into snags. 
 
 
TOKYO 00001588  011 OF 011 
 
 
SCHIEFFER