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UNCLAS SECTION 01 OF 13 TOKYO 003080 
 
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 11/05/08 
 
Index: 
 
1) Top headlines 
2) Editorials 
3) Prime Minister's daily schedule (Nikkei) 
 
Tamogami incident: 
4) Former ASDF chief Tamogami refused to resign from his post when 
Defense Minister Hamada so requested, so he was fired  (Mainichi) 
5) Government agonizing about how best to handle the Tamogami affair 
(Yomiuri) 
6) Turns out that 50 SDF personnel submitted essays to the same 
privately-sponsored contest that former ASDF chief Tamogami 
participated in  (Asahi) 
7) Pay cuts at the top of the Defense Ministry to show 
responsibility for allowing the Tamogami incident to occur 
(Mainichi) 
8) Opposition camp to summon former ASDF chief Tamogami to the Diet 
for testimony on his views in controversial essay that got him fired 
 (Sankei) 
9) Opposition camp upset that Tamogami was allowed an early 
retirement, threaten to further bog down the Indian Ocean refueling 
mission bill  (Tokyo Shimbun) 
10) LDP wants an early passage of the refueling mission bill so 
reluctant to drag Tamogami testimony into the deliberations on the 
legislation  (Mainichi) 
 
11) Foreign Ministry sets up policy office to handle anti-piracy 
measures  (Mainichi) 
 
Diet agenda: 
12) Pressure still building for a Lower House election in January, 
but does Prime Minister Aso have the will or desire to dissolve the 
Lower House?  (Sankei) 
13) Democratic Party of Japan (DPJ) President Ozawa still counting 
on Diet dissolution between now and January  (Sankei) 
 
Economic affairs: 
14) Government council report on the future of the economy sees need 
to raise the consumption tax by 2025 to 18 PERCENT  to pay the 
social security bill  (Tokyo Shimbun) 
15) Aso government's fixed tax cut plan denounced by critics as 
another pork-barrel measure  (Tokyo Shimbun) 
16) Important bill to strengthen the financial functions may hit a 
snag in the Upper House as the opposition seeks amendments 
(Mainichi) 
 
Articles: 
 
1) TOP HEADLINES 
 
Asahi: 
Capacity of medical schools to increase by 700 to 8,486 in FY2009 
 
Mainichi: 
Music producer Komuro fails to pay 14 million yen contract money for 
children's war sales 
 
Yomiuri: 
Government's National Council on Social Security's final report: 
Consumption tax should be increased by 3.3-3.5 PERCENT  in 2015 
 
 
TOKYO 00003080  002 OF 013 
 
 
Nikkei: 
Imported crude, natural gas prices plunge on tepid demand 
 
Sankei: 
National Council on Social Security's final report: Consumption tax 
should be hiked by 6 PERCENT  in 2025 
 
Tokyo Shimbun: 
National Council's final report: Consumption tax should be raised 
maximum of 18 PERCENT  in 2025 
 
Akahata: 
National Council's final report: Consumption tax should be increased 
by 3.3-11 PERCENT  in 2015 
 
2) EDITORIALS 
 
Asahi: 
(1) Social security reform: Prime Minister Aso should speak more 
precisely 
(2) Revitalization of regional economies: Cooperation and 
independence necessary 
 
Mainichi: 
(1) Cash incentives: Measures too loose 
(2) Arrest of Komuro: Serious crime that destroyed the dreams of 
young people 
 
Yomiuri: 
(1) Social Security Report: Find political will for social security 
reform 
(2) National Archives of Japan should be reorganized to make it a 
stronger organization 
 
Nikkei: 
(1) Panasonic's acquisition of Sanyo to prompt realignment of 
electronic manufacturers 
(2) We urge debate on the "pain" of social security reform 
 
Sankei: 
(1) Government should show concrete plans for consumption tax hike 
(2) China-Taiwan agreement: Question remains over "shelving of 
sovereignty" 
 
Tokyo Shimbun: 
(1) Arrest of Komuro: Hero of the times falls 
(2) Tibet issue: Continue dialogue 
 
Akahata: 
(1) Dispatch of helicopters to Afghanistan: Expansion of support for 
war impermissible 
 
3) Prime Minister's Official Residence (Kantei) 
 
Prime Minister's schedule, November 4 
 
NIKKEI (Page 2) (Full) 
November 5, 2008 
 
09:29 
Met with Defense Minister Hamada and Vice Defense Minister Masuda. 
Hamada remained. 
 
TOKYO 00003080  003 OF 013 
 
 
 
10:01 
Cabinet meeting. Environment Minister Saito remained. Then met with 
State Minister for Declining Birthrate Obuchi and Chairman Ozaki of 
the Expert Council on the Way Public Document Should be Controlled, 
followed by Public Security Intelligence Agency Director General 
Yanagi. 
 
11:35 
Met with al-Atiyah 
 
13:45 
Met with Vice Health, Labor and Welfare Minister Erikawa, followed 
by Deputy Secretary General Yamaguchi. Then met with Otsuji, 
chairman of the LDP caucus in the Upper House and Deputy Chief 
Cabinet Secretary Konoike. 
 
15:07 
Deputy Foreign Minister Sasae. 
 
16:00 
Issued appointment letters to Cabinet Counselor Gyoten and Nogami. 
Vice Finance Minister for International financial affairs Shinohara, 
Foreign Ministry Economic Affairs Bureau Director General Otabe, 
Matsumoto and Konoike were present. 
 
18:25 
National Council on Social Security meeting. Then met with Nippon 
Keidanren Honorary Chairman Okuda. 
 
19:36 
Dined with secretary and others at a steak house in Higashi-Azabu. 
 
22:22 
Met with secretary at a bar in Hotel Okura. 
 
0:30 
Arrived at the private residence. 
 
4) Ex-ASDF chief of staff refused to resign 
 
MAINICHI (Page 2) (Full) 
November 5, 2008 
 
On the issue of former Air Self-Defense Force Chief of Staff Toshio 
Tamogami's publication of an essay running counter to the 
government's view of history, Defense Minister Yasukazu Hamada asked 
Tamogami to resign as the problem was brought to light but he 
refused, sources revealed yesterday. The Defense Ministry therefore 
sacked Tamogami from his ASDF chief of staff post on Oct. 31 and 
retired him three days after that under the age limit. However, 
Tamogami's refusal of Hamada's recommendation is now being called 
into question from the perspective of civilian control over the 
Self-Defense Forces. 
 
According to the sources, Hamada called Tamogami on the evening of 
Oct. 31, when the essay was made public. Hamada then urged Tamogami 
to resign voluntarily, telling him: "This is a problem on the ASDF 
chief of staff's part. I'd like you to quit." However, Tamogami 
refused to do so, saying: "I wrote it based on my beliefs. I will 
not send in my resignation." 
 
 
TOKYO 00003080  004 OF 013 
 
 
The Defense Ministry then even considered taking disciplinary 
action. However, the Self-Defense Forces Law has no relevant 
regulations. The Defense Ministry therefore removed Tamogami from 
his ASDF chief of staff post and assigned him to the Air Staff 
Office. Even thereafter, Tamogami did not comply with the Defense 
Ministry's recommendation to go through procedures for resignation, 
the sources said. The Defense Ministry therefore mandated his 
retirement on Nov. 3. 
 
Meanwhile, Tamogami, meeting the press yesterday, stressed: "I will 
resign in accordance with the defense minister's decision. I will 
comply with civilian control." 
 
5) Government agonizing over Tamogami essay scandal 
 
YOMIURI (Page 4) (Abridged slightly) 
November 5, 2008 
 
The government and the ruling coalition are agonizing over the issue 
of former Air Self-Defense Force Chief of Staff Toshio Tamogami's 
essay on the Showa War and other events that was at variance with 
the government's view. Tamogami retired from the ministry as of Nov. 
¶3. The government is trying to bring the matter to a close swiftly 
with the Defense Ministry announcing yesterday punitive actions 
against senior ministry officials. Meanwhile, the opposition camp is 
set to thoroughly pursue the defense ministry on the fact that it 
did not take punitive action against Tamogami. 
 
Ahead of a cabinet meeting yesterday, the Prime Minister ordered 
Defense Minister Yasukazu Hamada to take steps to: (1) prevent a 
recurrence, (2) clarify oversight responsibility, and (3) provide an 
explanation to the public. Hamada explained in a press conference 
after the cabinet meeting: "No one wishes anyone to resign 
voluntarily nor are there prospects to cooperate in a set of 
procedures. We must keep paying salaries for several months." It is 
a fact that some in the ministry think that punitive measures might 
diminish the morale of SDF members. 
 
Meanwhile, major opposition Democratic Party of Japan President 
Ichiro Ozawa in a press conference yesterday declared: "Allowing him 
to retire does not face up to the heart of the problem. We are going 
to take that issue up as one associated with the LDP-New Komeito 
coalition." Four opposition parties agreed through their Diet chiefs 
meeting yesterday to summon Tamogami to the Diet for testimony. The 
DPJ demanded the LDP that Tamogami testify as early as Nov. 6 before 
the Upper House Foreign Affairs and Defense Committee, which is 
discussing a bill amending the New Antiterrorism Special Measures 
Law. With Tamogami revealing he plans to respond to the call, the 
prevailing view is that it has become difficult for the committee to 
take a vote on the legislation on Nov. 6, as was planned by the 
ruling bloc. 
 
6) Over 50 SDF members may have entered essay contest in which 
Tamogami won prize 
 
ASAHI (Page 39) (Abridged slightly) 
November 5, 2008 
 
The Defense Ministry said on Nov. 3 that Toshio Tamogami, 60, who 
was dismissed as Air Self-Defense Force chief of staff due to his 
award-winning essay that claimed Japan was wrongly accused of being 
a wartime aggressor, retired from the ministry as of Nov. 3. It was 
 
TOKYO 00003080  005 OF 013 
 
 
learned yesterday through the ministry's internal survey that over 
50 Self-Defense Force personnel seem to have entered essays in the 
same contest. The ministry is checking the process leading up to 
their applications and whether or not their essays contained any 
problem areas and expanding the survey to include personnel across 
the nation. 
 
The contest was run by the private hotel operator Apa Group under 
the theme "A truthful view of modern history." A total of 13 essays 
won prizes and no other SDF member (but Tamogami) was included in 
them. Reportedly there were over 230 entries. 
 
The ministry is investigating its internal bureaus and the Ground, 
Maritime, and Air Self-Defense Forces. The ministry's survey has 
found that more than 50 SDF personnel, including several ASDF 
members, had notified or consulted their superiors about submitting 
essays. 
 
When releasing an essay or a giving a speech on his/her duties, an 
SDF member must notify his/her superior about it in writing in 
advance. Tamogami verbally informed the head of the Defense 
Ministry's secretariat about his essay in a chat without presenting 
a written notice, based on his judgment that it did not concern his 
duties. The ministry has judged that the content of the essay was 
concerned with Tamogami's duties and that he should have informed 
his superior in writing. 
 
The ministry is expected to check exactly how many more SDF 
personnel entered the contest and to consider punitive measures 
against those essays posing problems. Although Tamogami indicated 
that he had not coerced essays from other SDF personnel, the 
ministry will investigate if the former top ASDF officer had exerted 
his influence regarding entering the contest. 
 
7) Administrative vice defense minister to be punished with pay cut 
over Tamogami essay scandal; Defense minister to return one month's 
salary 
 
MAINICHI (Page 1) (Abridged slightly) 
November 5, 2008 
 
The Defense Ministry announced yesterday punitive actions against 
senior ministry officials in connection with the release of an essay 
by former Air Self-Defense Force Chief of Staff Toshio Tamogami. The 
ministry will punish Administrative Vice-Defense Minister Kohei 
Masuda with a pay cut of 10 PERCENT  for one month for a violation 
of control and supervision under the Under the Self-Defense Forces 
Law; Personnel and Education Bureau Director-General Atsushi 
Watanabe with a reprimand; and Minister's Secretariat 
Director-General Kimito Nakae with a caution. Further, Defense 
Minister Yasukazu Hamada will voluntarily return his cabinet 
minister salary for one month. Senior Vice-Defense Minister Seigo 
Kitamura and parliamentary defense secretaries Ryota Takeda and 
Nobuo Kishi will also return 50 PERCENT  of their position salaries 
for one month. 
 
According to the Defense Ministry, Tamogami verbally informed Nakae 
that he had entered an essay contest but did not inform Nakae of the 
contents of his essay or file a written notice, as internally 
required. Given the situation, the ministry has decided to take 
punitive actions against the senior ministry officials at an early 
date in the judgment that administrative confirmation and other 
 
TOKYO 00003080  006 OF 013 
 
 
factors had been insufficient. 
 
8) Opposition parties to summon Tamogami 
 
SANKEI (Page 5) (Abridged) 
November 5, 2008 
 
The leading opposition Democratic Party of Japan (Minshuto) and 
three other opposition parties, the Japanese Communist Party, the 
Social Democratic Party, and the People's New Party, all took a 
critical stance yesterday toward the government over former Air 
Self-Defense Force Chief of Staff Toshio Tamogami's publication of 
an essay differing from the government's view of history. The four 
opposition parties held a meeting of their Diet affairs committee 
chairmen yesterday, in which they agreed to summon Tamogami to 
testify before the House of Councillors Foreign Affairs and Defense 
Committee as an unsworn witness. In addition, they also agreed to 
pursue the government's appointment and oversight responsibilities 
as well as the Defense Ministry's. 
 
In response, the DPJ's Keiichiro Asao, senior director on the House 
of Councillors Foreign Affairs and Defense Committee, told the LDP's 
Katsuhito Asano, also senior director on the committee, that the 
opposition bench would summon Tamogami to testify before the 
committee as an unsworn witness. 
 
Meanwhile, DPJ President Ichiro Ozawa, meeting the press yesterday, 
remarked: "Those in the military have their own various views about 
political issues. That is good. But it's not good to make statements 
about specific political issues. The Self-Defense Forces, which is 
an armed organization, should follow judgments made by the 
government elected by the people." This can be taken as indicating 
that Ozawa thinks an SDF officer's remark over historical perception 
was a political remark and that anyone in the SDF should abstain 
from making such remarks. 
 
The ruling coalition wants the House of Councillors Foreign Affairs 
and Defense Committee to take a vote tomorrow on a 
government-introduced bill amending the new Antiterrorism Special 
Measures Law. However, the ruling parties also fear that the 
Tamogami problem may delay the committee's vote on the legislation. 
 
9) Opposition parties object to ex-ASDF chief of staff's ordinary 
retirement over controversial essay; Diet likely to face rough going 
in debate on refueling bill 
 
TOKYO SHIMBUN (Page 2) (Full) 
November 5, 2008 
 
On the issue of former Air Self-Defense Force Chief of Staff Toshio 
Tamogami's publication of an essay justifying Japan's aggressive 
wartime past, all opposition parties yesterday raised objections to 
the ordinary retirement of Tamogami after he refused to submit to 
disciplinary procedures. The opposition parties will pursue the 
government's responsibility. The government, driven by a sense of 
crisis, took action in haste to punish senior Defense Ministry 
officials. However, the Diet will inevitably be affected in its 
deliberations. It will not likely be so easy to draw the curtain on 
the issue. 
 
"The most immediate action is this way (involuntary retirement)." So 
saying, Chief Cabinet Secretary Takeo Kawamura admitted in a press 
 
TOKYO 00003080  007 OF 013 
 
 
conference that the retirement of Tamogami under the date of Nov. 3 
was intended to settle the situation quickly. 
 
On Oct. 31, the government dismissed Tamogami from his ASDF chief of 
staff post as soon as the issue was brought to light. The government 
wanted Tamogami to voluntarily quit the Defense Ministry. However, 
he refused both voluntary resignation and disciplinary punishment. 
The government therefore felt it had no choice but to retire him 
under the age limit. 
 
Democratic Party of Japan (Minshuto) President Ichiro Ozawa 
criticized the early retirement of Tamogami, saying: "The government 
dismissed him and then retired him under the age limit. The 
government lacks public accountability. It's very regrettable." 
 
The DPJ, the Japanese Communist Party, the Social Democratic Party, 
and the People's New Party held a meeting of their Diet affairs 
committee chairmen yesterday, in which the four opposition parties 
agreed to summon Tamogami to the House of Councillors Foreign 
Affairs and Defense Committee. They will pursue Prime Minister Aso's 
responsibility, as well as Defense Minister Hamada's, seeking to 
drive the government and the ruling parties into a corner. For that 
purpose, a DPJ executive implied that the committee would go so far 
as to refuse to take a vote on the refueling bill. 
 
Encountering such sharp reactions from the opposition parties, the 
government and the ruling parties do not expect discussion of the 
legislation to be as smooth as planned. "This will inevitably affect 
Diet deliberations on the bill amending the new antiterror special 
measures law," said an executive of the LDP Diet Affairs Committee. 
The government allowed Tamogami's early retirement, since it was in 
a hurry to settle the problem. Consequently, such action ended up 
incurring the wrath of the opposition parties. 
 
The Defense Ministry announced its punishment of seven senior 
officials yesterday evening at Aso's orders, including Hamada's 
return of part of his pay. The government wants to dodge the 
opposition bench's attack. This, however, does not seem to be 
convincing to the opposition parties. 
 
10) Talks on timetable for refueling bill breaks down as DPJ demands 
summoning ex-ASDF chief to Diet over controversial essay 
 
MAINICHI (Page 5) (Full) 
November 5, 2008 
 
The top executive members of the Liberal Democratic Party (LDP) and 
the Democratic Party of Japan (DPJ) in the House of Councillors 
Foreign Affairs and Defense Committee yesterday discussed the 
timetable for deliberations on a bill amending the New Antiterrorism 
Special Measures Law to extend the Maritime Self-Defense Force's 
refueling mission in the Indian Ocean. But the talks ended with no 
agreement as the DPJ executive unofficially sounded out his 
counterpart on the party's plan to summon Toshio Tamogami, who was 
dismissed as Air Self-Defense Force chief of staff over his essay 
contradictory to the government's current position on Japan's 
wartime history, to the Diet for testimony. The LDP executive 
insisted on an early vote on the bill, remarking: "We have fully 
discussed the issue." The DPJ will formally propose in an executive 
meeting today the summoning of Tamogami to the Diet. 
 
The DPJ, the Japanese Communist Party, the Social Democratic Party, 
 
TOKYO 00003080  008 OF 013 
 
 
and the People's New Party held a meeting of their Diet Affairs 
Committee chairmen yesterday in the Diet Building. The four chairmen 
agreed to call on the government to summon Tamogami to the Diet. If 
Tamogami is summoned, they will pursue the government's 
responsibility in intensive deliberations at the said committee and 
other meetings, focusing on why it appointed Tamogami as ASDF chief 
of staff and why he contributed the controversial essay to contest. 
They aim to bring Tamogami into the Diet on Nov. 11, at the 
earliest. 
 
The DPJ has also indicated an intention to invoke its right to 
investigate state affairs over the report on a fact-finding team to 
Afghanistan to be submitted by the government to the executive 
meeting today of the Upper House Foreign Affairs and Defense 
Committee if the party finds its contents insufficient. It has thus 
become more uncertain for the refueling bill to clear the Diet. 
 
11) Foreign Ministry set up policy office tasked with anti-piracy 
measures 
 
MAINICHI (Page 5) (Full) 
November 5, 2008 
 
The Foreign Ministry set up a maritime safety policy office under 
the National Security Policy Division of the Foreign Policy Bureau 
yesterday. The ministry will be more actively involved in maritime 
safety, tackling piracy and other problems. 
 
Prime Minister Taro Aso has indicated a positive view about new 
legislation to enable Japan to dispatch Maritime Self-Defense 
Force's vessels to guard commercial freighters and other ships from 
possible attacks by pirates in pirate-infested waters off Somalia, 
East Africa. The new office will take the initiative in drafting a 
new law in the Foreign Ministry. 
 
According to the Foreign Ministry, about 99 PERCENT  of Japan's 
trade depends on maritime transport, so the government has been 
urged as an important task to prepare measures to ensure safe 
navigation, as well as to combat terrorists and pirates. The 
government enacted the Basic Law of the Sea in April of last year, 
based on the UN convention on the Law of the Sea. This legislation 
has made it possible for Japan to promote maritime policies in a 
comprehensive way and prompted the ministry to establish the said 
office. 
 
The number of attacks by pirates has decreased in Southeast Asia. 
But such attacks off Somalia, as well as in the Gulf of Aden and the 
Red Sea have surged. The number increased from 21 in 2003 to 63 in 
the period between January and the end of September this year. 
Damage on ships or tankers owned by Japanese companies has been 
reported. 
 
12) Will Aso dissolve Lower House in January? Diet session might be 
substantively extended for passage of financial bill 
 
SANKEI (Page 5) (Full) 
November 5, 2008 
 
The government and ruling parties yesterday decided in a House of 
Representatives Financial Affairs Committee session to bulldoze 
through the committee today a vote on a bill revising the Financial 
Functions Strengthening Law in order to get it through the Lower 
 
TOKYO 00003080  009 OF 013 
 
 
House on the 6th. This bill will enable the government to inject 
preliminary public funds into financial institutions. The ruling 
camp has judged it necessary to show a clear stance before Prime 
Minister Taro Aso attends the emergency summit of the Group of 
Twenty on the global financial crisis on Nov. 15. If the opposition 
camp toughens its attitude from now on, the ruling bloc will be 
forced to substantively extend the current extraordinary session 
until early next January with a two-thirds lower chamber majority 
override vote or 60-day constitutional rule in mind. (Article 59 of 
the Constitution stipulates that if the upper chamber rejects a 
bill, it can still be passed by a two-thirds lower chamber 
overriding vote.) Given that situation, there is a possibility that 
the Lower House may still be dissolved in January. 
 
No choice 
 
Ruling Liberal Democratic Party (LDP) Diet Affairs Committee 
Chairman Tadamori Oshima said: "All parts that the Democratic Party 
of Japan (DPJ) suggested have been modified. I want to take a vote 
on the financial bill tomorrow." 
 
DPJ Diet Affairs Committee Chairman Kenji Yamaoka stated: "Are you 
going to hold a vote before going through thorough deliberations? 
Well, we then have no choice." 
 
The Oshima-Yamaoka meeting ended in just 15 minutes yesterday. 
Oshima judged that he was able to obtain Yamaoka's approval with his 
words: "We have no choice." Later in the day, Yamaoka bumped into 
New Komeito Diet Affairs Committee Deputy Chairman Hiroyoshi Nishi 
in the Diet building and told him: "The talks ended in failure. A 
forced vote that your party likes will be taken tomorrow. You will 
keep using two-thirds (lower chamber override vote) from now on, 
won't you?" 
 
Wrapping up consultations on revising the financial bill with three 
opposition parties, the ruling coalition intends to take a vote on 
the bill tomorrow afternoon in a Lower House plenary session after 
carrying out a question-and-answer session today in a Lower House 
Financial Affairs Committee session. The ruling coalition has come 
up also with the idea of having the opposition camp take a litmus 
test by putting both the government's original bill and the revised 
one to votes. 
 
Until G-20 summit 
 
The ruling camp has been forced to shift to taking a hard-line 
tactic because it needs to show a clear stance before the G-20 
financial summit. Another reason is that it has judged that it will 
not be able to accept the DPJ's demand that public funds not be 
injected into the troubled bank, ShinGinko Tokyo, and that Diet 
approval be required to inject public funds into the Norinchukin 
Bank (agricultural cooperative bank). The ruling coalition also is 
trying to urge the opposition to agree to an early passage of the 
legislation. 
 
However, if deliberations are stalled in the opposition 
camp-controlled Upper House, the ruling coalition will be pressed to 
largely extend the ongoing session, which ends on Nov. 30. It will 
possible on Jan. 5 to take a two-thirds lower chamber override vote 
on the financial legislation. In case the Upper House fails to take 
a vote on a bill amending the new Antiterrorism Special Measures Law 
to allow the Maritime Self-Defense Force to continue its refueling 
 
TOKYO 00003080  010 OF 013 
 
 
mission in the Indian Ocean, there is a possibility that an override 
vote will be taken on the two bills in the Lower House. 
 
If such happens, the opposition camp will probably submit a 
no-confidence motion against Prime Minister Aso to the Upper House. 
There may be a possibility that Aso will dissolve the Lower House 
immediately after taking overriding votes, arguing that he would 
like to ask for the people's vote of confidence in order to quickly 
implement a fresh economic stimulus package after presenting a 
second additional budget for fiscal 2008 that includes the economic 
package, as well as the state budget for fiscal 2009. 
 
DPJ to demand for revisions to financial bill 
 
The DPJ plans to call for correction of the financial bill by 
pursuing severely the allegation that a ruling coalition member 
acted as an intermediary for ShinGinko Tokyo's loans, as well as the 
practice of amakudari in which retired administrative agriculture 
vice ministers take the president's post a the Norinchukin Bank. 
Although a mood calling for Lower House dissolution is certain to 
grow, the ruling and opposition camps will likely continue their war 
of nerves, with an eye on public approval ratings for the cabinet 
and on the economic situation. 
 
13) DPJ head Ozawa orders party to take battle stations: Election 
will be between the fall and beginning of next year 
 
SANKEI (Page 5) (Excerpts) 
November 5, 2008 
 
Democratic Party of Japan (DPJ) President Ichiro Ozawa at a meeting 
of party officials yesterday ordered that they be prepared for 
action regarding Diet dissolution and a snap election. He said: 
"Although the mass media and Prime Minister Taro Aso are saying 
there will be a delay, in my judgment, Diet dissolution will come 
between the fall and the beginning of next year. I want you to keep 
up your spirit that we will win the election without fail." 
 
Ozawa said that the reason for his belief that the time for the 
Lower House election is drawing near was: "Since the Prime Minister 
is not a person like former Prime Minister Junichiro Koizumi, who 
would avoid a showdown, he is not sharp in his judgment. (His 
administration) cannot last until next September (when the Lower 
House term ends), so it is inevitable that the time for carrying out 
a general election is drawing near. If he does not do so, the Prime 
Minister himself will probably have to leave (his position at the 
top)." 
 
14) Sales tax to be raised up to 18 PERCENT  by 2025, according to 
final report by government council: Imperative to finance social 
security 
 
TOKYO SHIMBUN (Top Play) (Full) 
November 5, 2008 
 
The government's National Council on Social Security, chaired by 
Tokyo University Graduate School Professor Hiroshi Yoshikawa, on 
November 4 submitted a final report that calls for the strengthening 
of the functions of the social security system and the indication of 
a way to secure stable fiscal resources to finance that. In 
response, the government plans to set up a roundtable led by Deputy 
Chief Cabinet Secretary Jun Matsumoto and Yoshikawa to draw up a 
 
TOKYO 00003080  011 OF 013 
 
 
road map for concrete procedures for reform before year's end. 
 
The report notes that in order to finance public expenses needed to 
strengthen the functions of the social security system, it would be 
necessary to raise the consumption tax 3.3 PERCENT -3.5 PERCENT  by 
fiscal 2015 and about 6 PERCENT  by fiscal 2025, when the aging of 
the society is expected to peak. 
 
The report also notes that in the event of adopting a tax system of 
financing the whole amount of the basic pension with tax money 
alone, a 6 PERCENT -11 PERCENT  hike in the sales tax by fiscal 2015 
and a 9 PERCENT -13 PERCENT  hike by fiscal 2025 would be needed. It 
says that the sales tax rate -- currently 5 PERCENT  -- should be 
raised up to 18 PERCENT . 
 
The report points out that the present social security system is 
facing various challenges, including the languished medical service 
and nursing-care systems. 
 
Concerning the basic pension, the bone of contention, the report 
includes both cases -- the introduction of a social insurance system 
of financing it with insurance premiums and tax money as is now the 
case and the introduction of a tax system of financing the full 
amount with tax money alone, steering clear of reaching a conclusion 
on which system should be employed. 
 
As measures for those who did not contribute to the national pension 
system and those who can only receive a small amount of pension 
benefits, the report proposes that flexible measures, such as 
setting up a minimally guaranteed pension amount and additional 
pension premium payments, should be looked into. 
 
Regarding medical and nursing-care services, the report calls for 
improving services and enhancing efficiency simultaneously, citing 
that those services are faced with such challenges as the emergency 
medical care issue and impoverished local medical services. 
 
The package characterizes measures to address the declining 
birthrate as a task that should be given top priority, noting that 
the issue will have an effect on the sustainability of social 
security. 
 
15) Government, ruling parties to discuss limiting flat-sum benefit 
payment plan in response to sharp criticism 
 
TOKYO SHIMBUN (Page 2) (Abridged slightly) 
November 2, 2008 
 
Following Prime Minister Taro Aso's statement on his decision to 
exempt high income earners from the list of those entitled to 
receiving flat-sum benefit payment, a policy incorporated in the 
package of additional economic stimulus measures, the government and 
the ruling parties on November 4 started discussing a specific way 
of limiting the number of those eligible for the payment. The prime 
minister at first announced that benefits would be paid out to every 
household. However, he was forced to change that policy, meeting 
criticism that the uniform payment of benefits to people, including 
high income earners, is tantamount to doling out pork-barrel 
largesse. 
 
Regarding the benefit payment, the New Komeito has strongly insisted 
that the payment must be made within the current fiscal year to help 
 
TOKYO 00003080  012 OF 013 
 
 
people in their daily lives. As a result, the government decided not 
to set an income limit, giving priority to the adoption of an easy 
method that would enable an early implementation of the plan. 
 
When he released the package of additional economic stimulus 
measures on October 30, the prime minister categorically said that 
the flat-sum benefit would be paid to every household. He noted: 
"The benefit will be paid to every household. The amount should come 
to about 60,000 yen per household, according to a simple 
calculation." 
 
The opposition parties immediately after the release of the economic 
package started criticizing this measure as pork-barrel largesse 
aimed at the upcoming next Lower House election. Many lawmakers from 
the ruling parties, who returned to their home constituencies over 
the three-day holiday weekend, came to take the view that there 
should be an income restriction, with one veteran Diet member 
saying, "Many of our supporters said that it is strange to pay out 
such a benefit to high income earners as well." 
 
State Minister for Economic and Fiscal Policy Kaoru Yosano, who 
compiled the economic package, repeatedly stressed on TV talk shows 
the need to set an income restriction. The government and the ruling 
parties had no choice but to switch to the adoption of an income 
restriction, prodded by public opinion. 
 
There is, however, a barrier to the setting of an income 
restriction. Complicated procedures, such as an amendment to 
relevant laws, would become necessary in order for local governments 
that will be in charge of actual work of paying out the benefit to 
use tax-related information to grasp each household's income. If it 
takes time to undergo this procedure, it would become difficult to 
pay out the benefit within the current fiscal year. 
 
Yosano during a press conference on the 4th underscored: "It would 
not be so difficult, if payment is made, based on the amount of 
income declared by recipients themselves. This method would not 
require any legal changes." However, it would be controversial to 
adopt a method that could lead to false income declarations. 
 
Yosano, LDP Policy Research Council Chairman Kosuke Hori, Acting 
Chairman Hiroyuki Sonoda and former State Minister for Financial 
Policy Hakuo Yanagisawa on the 4th conferred on specific matters. 
However, with the talks focusing on procedures, participants were 
unable to work out an income restriction demarcation line. 
 
16) Bill to strengthen financial system to clear Lower House 
tomorrow but to deadlock in Upper House due to DPJ's demand for 
amendments 
 
MAINICHI (Page 5) (Full) 
November 5, 2008 
 
Liberal Democratic Party (LDP) Diet Affairs Committee Chairman 
Tadamori Oshima conveyed to his Democratic Party of Japan (DPJ) 
counterpart Kenji Yamaoka in the Diet Building yesterday his party's 
plan to take a vote in a meeting of the House of Representatives' 
Financial and Monetary Affairs Committee today on a bill amending 
the Financial Function Strengthening Law to enable the government to 
pour public funds into local financial and other institutions. The 
bill is likely to be adopted at the committee and clear the Lower 
House by a majority from the ruling coalition tomorrow. But the LDP 
 
TOKYO 00003080  013 OF 013 
 
 
and the DPJ remained divided in talks on revising the bill. Four 
opposition parties have decided to vote against the bill in the 
meeting today. 
 
The DPJ aims to revise the bill in line with its proposals in the 
opposition-controlled House of Councillors. After the DPJ's bill is 
adopted in the Upper House and then sent to the Lower House, the 
ruling coalition will have to either agree on the DPJ bill or use 
its two-thirds override vote in the Lower House to reinstate its own 
bill. Should the bill revised in the Upper House pass the Diet with 
a second lower chamber overriding vote, it will be the first case in 
51 years. The revision bill is likely to be a test case in the 
divided Diet for Prime Minister Taro Aso, who forwent his original 
plan for dissolving the Lower House for a snap election. 
 
In the meeting of the LDP and DPJ Diet affairs committee chairmen 
yesterday, Oshima indicated his willingness to deal with the 
following three contentious points in the talks on revising the bill 
by adopting a supplementary resolution: (1) Necessity for a Diet 
resolution in the case of public funds injected into the 
Agricultural and Forestry Central Bank; (2) political neutrality of 
the said central bank; and (3) removal of New Bank Tokyo from those 
eligible for public funds. But Yamaoka demanded rewriting the bill, 
saying: "There will be no substantive effect." As it stands, the two 
failed to find common ground. The ruling coalition now intends to 
independently revise only the matters that both sides agreed on. 
 
Speaking before reporters in the Diet Building yesterday, Oshima 
explained why the ruling camp is eager to push the revised bill 
through the Lower House: "The prime minister hopes to quickly take 
best measures to strengthen the domestic financial system. It is 
necessary to establish a safety net to prevent local economies from 
being negatively affected by the current situation." Meanwhile, a 
senior DPJ member told reporters in Tokyo: "The public should 
understand our party's view toward the Agriculture and Forestry 
Central Bank and New Bank Tokyo. I wonder if the ruling camp would 
be able to resort to an override vote under such a situation." 
 
SCHIEFFER