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Japanese PM calls for fiscal reform in policy speech

06-11-2010 14:45 BJT

TOKYO, June 11 (Xinhua) -- Japan's Prime Minister Naoto Kan on Friday called for multilateral discussions to end the nation's unsustainable dependency on public borrowing and called for fiscal reform to tackle prolonged deflation in the country.

Speaking in his first policy address to parliament since taking office as prime minister on Tuesday, Kan pledged to work on fiscal reform, highlighting the debt crisis in the eurozone as a potential pitfall.

"We can see from the eurozone confusion that began in Greece that our finances can go bankrupt if we don't address our rising public debt," said Kan.

"We cannot sustain public finance that overly relies on issuing bonds. There is a risk of default if the growing public debt is neglected and if trust is lost in the bond market," the premier said.

Kan called for multilateral cooperation between the parties to address Japan's burgeoning debt, which is almost 200 percent of annual economic output, the largest in the industrialized world.

According to the Ministry of Finance, Japan's state debt amounted to a record 882.9 trillion yen (9.7 trillion U.S. dollars) as of March 31.

Kan said the government would adhere to its plan to put together by the end of June a medium-term fiscal framework that includes caps on spending for the state budget over the next three years, as well as a set of longer-term targets.

"Our country has a huge outstanding debt and it is not a problem that can be solved in a short time," he said.

"That's why we now have to undertake a drastic overhaul for achieving fiscal soundness."

The 63-year-old premier said that he will work ceaselessly towards the pursuit of rebuilding the economy, finances and social welfare system and called for the public's trust in his plan to reverse 20 years of economic stagnation, which Kan attributed to "a lack of political leadership."

Kan added that Japan will promote growth and create more jobs by taking advantage of the need to solve social problems, such as those related to environmental protection and the aging of the population.

Kan also said that there was "no avoiding" reforming in terms of the tax system, although did not elaborate that during his policy speech, although he was known as an advocate for raising the consumption tax rate from the current level of 5 percent in his former role as finance minister under Prime Minister Yukio Hatoyama.

 

Editor:Zhang Pengfei |Source: Xinhua

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