Statement by Yoshimitsu Kobayashi, Chairman of Keizai Doyukai
On Cabinet Approval of "Growth Strategy 2017" and "Basic Policy on Economic and Fiscal Management and Reform 2017"

June 9, 2017

Yoshimitsu Kobayashi
Chairman, Keizai Doyukai

1. Today, the Cabinet approved "Growth Strategy 2017" and "Basic Policy on Economic and Fiscal Management and Reform 2017." The two documents have incorporated items such as top-priority policy targets indispensable to achieve economic growth and fiscal consolidation simultaneously. Going forward, a concrete approach to issues including regulatory reform, legal system improvement, and the financing must be pursued to carry out and realize those policy targets.
2. "Growth Strategy 2017" presents a good mix of "value source creation" and "a scheme to underpin value maximization." The strategy also stipulates the necessity to make the corporate governance reform practically effective so that it will support the top management's daring decision for investment and reorganization. It is now up to the top management. We, corporate executives, must strengthen the corporate earning power and enhance its value by leading such move in each company.
3. "Basic Policy on Economic and Fiscal Management and Reform 2017" has introduced public debt to GDP ratio as a new benchmark to measure stock-base financial sustainability on top of the existing benchmark of the primary balance to measure the same from fund flow base. In this regard, we emphasize a pressing need to take concrete measures to achieve even a surplus in the primary balance estimated 8.3 trillion yen deficit in fiscal 2020 according to Cabinet Office's projection based on the economic recovery scenario with 10 percent consumption tax rate in October 2019. We reiterate that the introduction of public debt to GDP ratio should never result in loosening of the fiscal discipline.

Japanese version