Japanese parliament approves postal reform bills
Japan’s parliament approved the privatisation of the country’s postal service Friday, setting in motion the creation of the world’s largest private bank and delivering a crucial victory for Prime Minister Junichiro Koizumi’s reform program.
The package was passed 134 to 100 by the upper house. The vote paved the way for the enactment of the closely watched legislation, since the package was passed overwhelmingly by the powerful lower house on Tuesday.
The bills would split up and sell off Japan Post’s delivery, savings deposit and insurance services by 2017. The system controls some 330 trillion yen (USD2.9 trillion; euro2.42 billion) in savings and insurance deposits.
Koizumi has argued the change, which is the centerpiece of his reform platform, is needed to put the system’s massive deposits at the disposal of private investors. Those deposits had long been used by the ruling party as a fund for wasteful but politically useful public works projects.
The vote capped a string of triumphs for Koizumi, who called snap elections that he billed as a referendum on postal reform after the upper house rejected the package in August. His Liberal Democratic Party won the ballot in a landslide, guaranteeing the package’s success in Parliament.
“Japanese voters have shown in the last elections their deep understanding toward Prime Minister Koizumi, who says postal reform is the core of his reform program,” Tsutomu Takebe, secretary general of the LDP, said Friday before the legislation was approved.
Heizo Takenaka, economic minister and architect of the reform proposal, told an upper house committee held before the full chamber vote that the government was determined to do all it can to push through reform.
Under the plan, the division of the different services of Japan Post would start in late 2007. Aside from insurance holdings, the system has more than 200 trillion yen (USD1.75 trillion; euro1.46 trillion) in savings deposits. That’s more than the world’s largest private bank, the recently formed Tokyo-based Mitsubishi UFJ, which has total assets of around 190 trillion (USD1.66 trillion; euro1.39 trillion).
U.S. based Citigroup Inc. has USD1.55 trillion; euro1.29 trillion) in assets, based on the most recent company figures.
Proponents argue the reform would make more efficient use of Japan Post’s massive deposits, while streamlining the country’s enormous delivery service.
Reform opponents, however, fear the bills will lead to job losses and would put ordinary people’s savings in the hands of untrustworthy private investors. They also argue that privatisation will lead to a reduction in delivery services in sparsely populated rural areas.
“This legislation in no way deserves to be called privatisation,” said Kenzo Fujisue, a main opposition Democratic Party of Japan lawmaker, shortly before the vote in the upper house.
“If you let a powerful Japan Post enter businesses such as convenience store chains and real estate, it is possible the existing businesses will be forced to close down,” he said.
