Panel fails to back Koizumi on postal privatization

A key report on the privatization of the state-run postal services seems set to disappoint Prime Minister Junichiro Koizumi.

Koizumi, a big proponent of privatization, had hoped for strong backing from the report, which is due out as early as the end of this month.

Instead, Naoki Tanaka, who chairs the advisory panel looking into the issue, said the report will only set a range of options for privatizing mail delivery and postal savings and life insurance services.

“Our role is to offer a vision for privatization, and at the same time present the pros and cons (of each proposal),” Tanaka told a news conference that followed the panel’s meeting on Monday.

The panel is understood to be deeply divided over how to privatize the services after a new postal public corporation goes into operation next April.

Reflecting the difficulties in reaching an agreement, the report will not set a deadline for a decision on the way privatization should unfold, nor a date for the submission of finalized privatization bills, Tanaka said.

Tanaka called for a separate committee to be set up to discuss the matters.

“It’s beyond our role,” he said. “It’s the Cabinet’s job to make a judgment on that, and ultimately the Diet should make the final decision.”

Koizumi wants the three key postal services to be completely privatized after they are transferred to the public corporation.

According to sources close to the panel, members are planning to suggest three or four privatization options.

The most lukewarm proposal calls for the new postal agency to be designated as a special corporation funded entirely by the government, with privatization to be carried out in phases.

In the most radical scenario, the nation’s post offices would stop accepting deposits for postal savings and applications for life insurance policies and be privatized in one fell swoop under a privately funded agency.

A compromise suggestion would turn the agency into a business entity but with government support.

Tanaka on Monday showed reporters a memo outlining key aspects of the upcoming report.

These included a stipulation that postal services must continue to be available nationwide following privatization-a concession to those wary of privatization.