Postal privatization faces hurdles

Analysis / Postal privatization faces hurdles
From THE YOMIURI SHIMBUN/DAILY YOMIURI, June 21st, 2001

Analysis / Postal privatization faces hurdles
Akihiro Okada Yomiuri Shimbun Staff Writer Yomiuri
Public Management Ministry officials are discussing the transformation of the postal service into a public corporation, set to occur in 2003, but major issues still remain unresolved. Such issues include fostering management efficiency and dealing with private-sector competition. The public management minister is expected in early August to establish a private study group, which will be charged with completing proposals on the transformation by the end of the year so that the necessary bills can be submitted to the 2002 ordinary Diet
session. Prime Minister Junichiro Koizumi has also formed his own private
research group to study the future management of three major services formerly entrusted to the Post and Telecommunications Ministry–postal services, banking and life insurance. The prime minister's group, however, is looking at what will happen after the services are entrusted to the proposed Postal Public
Corporation. The Public Management Ministry, therefore, is responsible for the process of putting the services under the envisaged public corporation. The ministry plans to require the proposed public corporation to annually disclose the market value of its assets, including real estate–a change from the current system, under which assets must be disclosed only once every 10 years. In addition, the market values of stocks purchased with funds obtained through postal insurance premiums must now be disclosed in another change from the current system. The ministry hopes to hire outside auditors to raise the
transparency of the corporation's management to private sector levels. Discussions on the salaries of postal employees have led to a plan that will abolish the commission employees earn on savings accounts held by customers, but will link employees' salaries with work evaluations and the organization's earnings. The ministry will also discuss the level of taxes to be imposed on
the public corporation. Previously, post offices have been criticized for not paying taxes. Three former public corporations,including former Nippon telegraph and Telephone Public Corporation and Japan National Railway, had paid a portion of their property taxes, but had been exempt from corporate taxes. Most Public Management Ministry officials support taxing the proposed Postal Public Corporation at the same level as the former telephone and national railway corporations. However, some criticize the plan for being shortsighted. Employees of the proposed Postal Public Corporation will be considered public
servants, which will be an unprecedented situation. Public corporations are established to boost efficiency while keeping a certain distance from the government. Therefore, those who support the organization's privatization say the corporation will remain dependent on the government and the salary system will remain the same as the rigid government system currently in place. Public Management Vice Minister Akira Shimazu has said that the government will still guarantee postal savings after entrusting the service to a public corporation. His comment is expected to raise criticism, as the postal ministry does not pay deposit insurance to offset a collapse of the organization, while private financial institutions do. The Public Management Ministry has also been discussing the degree to which it should allow private companies to operate mail services currently only in use by the government's postal services. Although the government has already passed a law allowing private courier companies to deliver letters, the Public Management Ministry hopes to limit the size of letters that private companies may handle, as they fear post offices would not be able to handle the increased competition. Koizumi, however, has insisted on fully liberalizing the mail business, and the debate between the prime minister's office and the ministry is expected to heat up, complicated by lawmakers championing the interests of the current postal system. Copyright 2001 The Daily Yomiuri Copyright 2001 The Yomiuri Shimbun/Daily Yomiuri.
Source: World Reporter (Trade Mark) – Asia Intelligence Wire.