Japanese gov’t shows readiness to make more concessions on postal reform

The government reiterated its readiness Tuesday to make more concessions over its plans to privatize Japan’s postal system as the ruling Liberal Democratic Party continued last-ditch efforts to come up with specific compromises to demand.

“We are considering a framework to fully privatize Japan Post’s financing and insurance functions while not negatively affecting (special post offices and those who run them),” Chief Cabinet Secretary Hiroyuki Hosoda said in a press conference.

“We are engaged in discussions on the assumption any scheme that falls in line with the purpose of that framework would be okay,” the top government spokesman said.

The LDP reopened a meeting of its policy panel on postal reform Tuesday afternoon after failing to reach a consensus in its marathon talks from Monday afternoon through predawn hours Tuesday.

LDP executives have proposed seeking six changes to the government privatization plans, including allowing the planned firm to manage the post office network to acquire a certain stake in the units to take over postal savings and “kampo” life insurance services.

Under the bills the government outlined April 4, Japan Post will be split into four business entities under a holding company in April 2007, the start of a 10-year privatization process, as the government has planned from the beginning despite opposition within the LDP.

The four business units will each take over Japan Post’s mail delivery, postal savings, life insurance services and nationwide network of post offices.

But the outline incorporated several compromises the government has made to the party, such as setting up a maximum 1 trillion yen fund to cover losses from keeping postal services, including savings and life insurance, available even in thinly populated areas.

The LDP proposals would also include doubling the sum of the fund to 2 trillion yen and requiring the financial spinoffs to keep their services universally available even after their full privatization.

While obliging that the planned spinoffs to take over the public corporation’s financial operations will be fully privatized by March 2017, the outline also allows the firms to come under the government-affiliated holding company again afterward.

Also at stake in the LDP panel are proposals to guarantee operational freedom to the four spinoffs, a triennial scrutiny of post offices’ situations for the Diet and securing sufficient capital for the spinoffs at their launch.

The government wants to submit a set of six bills to parliament by April 28 to see them passed during the ongoing Diet session through June 19.

The governing coalition of the LDP and the New Komeito party has withheld support due to strong opposition from within, particularly the LDP.