Japan LDP to set up panel to study postal services privatization

The ruling Liberal Democratic Party (LDP) will set up a special committee to discuss the privatization of Japan’s postal services, the LDP’s policy chief indicated.

LDP Policy Research Council Chairman Fukushiro Nukaga made the statement about his party’s plans during a Japan Broadcasting Corp.’s discussion program with counterparts from the ruling and opposition camps.

“We would like to come up with a conclusion as soon as possible on how (the postal services) should be operated, including privatization,” Nukaga said.

The government set up public corporation Japan Post to have it take over the postal services of mail delivery, postal savings and “kampo” life insurance from the government’s Postal Services Agency.

Prime Minister Junichiro Koizumi has reiterated his intention to privatize the three services in April 2007.

During the Sunday program, participants from the LDP’s ruling coalition partners — the New Komeito party and the New

Conservative Party — expressed support for the privatization in principle, while the opposition Japanese Communist Party and Social Democratic Party voiced opposition to it.

The policy chief of the main opposition Democratic Party of

Japan (DPJ), Yukio Edano, told the same program that he believes that postal services should be maintained as it is, while having postal savings and postal life insurance compete with private financial institutions and insurers under the same conditions.

“The funds collected by the postal savings and postal life insurance are being exploited by vested interests through public corporations,” Edano said.

In Japan, public funds from the postal savings and insurance are channeled to public corporations’ finances through the government’s fiscal investment and loan program.

Regarding revenue for a plan to increase the government’s contribution to the pension system from the current one-third to half, Nukaga said, “We would like to think about it, including

(the possibility of increasing) consumption tax, while gaining the public’s understanding.”

But the New Komeito’s policy chief Kazuo Kitagawa disagreed, saying it is inappropriate to raise consumption tax at this time

and called for considerations to abolish special tax cuts, while

the DPJ’s Edano suggested cutting government expenditures such as

by terminating unnecessary public works projects.