Reshuffled second Koizumi Cabinet launched

The reshuffled second Koizumi Cabinet was inaugurated on September 27.

(For a List of Ministers, see: http://www.kantei.go.jp/foreign/koizumidaijin/040927/index_e.html)

Prime Minister Koizumi himself dubbed this "the Reform Implementation Cabinet."

The following were established as the key elements of the government's basic policies. (1) Thorough enforcement of the shift from the public to the private sector, and from the national level to regional levels, (2) revitalization of business and the economy, and (3) ensuring the safety and security of people's livelihoods, among other issues. In the employment and labor sectors, the Cabinet is poised to vigorously promote programs to encourage the employment of young people, focusing on job-hoppers and non-working individuals.

In the three and a half years since the Koizumi Administration was launched, Chikara Sakaguchi continued to serve as Minister of Health, Labour and Welfare. One important issue after another arose during his tenure, including the worst-ever unemployment rate, revisions to employment insurance, and pension reforms. Sakaguchi appeared to be one of the busiest of all the ministers, constantly the target of criticism and attacks.

With the recent reshuffling of Cabinet ministers, Hidehisa Otsuji replaced Sakaguchi as the new Minister of Health, Labour and Welfare.

Immediately after being inaugurated as the new minister, Otsuji declared that, in the context of the rapid aging of the population and the declining birthrate, as well as changes in the economic structure, he would take the initiative in working on reforming the social security system, carrying out employment measures to increase young people's motivation for work, and countering the falling birthrate.

Meanwhile, the new Minister of Justice was charged with the task of concurrently serving as Minister of State for Youth Affairs and Measures Against the Declining Birthrate. As in the case of the reform of the social security system, the new Minister of Health, Labour and Welfare will be pushing through his programs while coordinating matters with relevant ministries and agencies. It is anticipated that making adjustments with the Ministry of Finance, one of whose key aims is to reduce the fiscal deficit, will be a tough job.

The opposition party and labor unions are becoming increasingly impatient with the weakness of past attempts at reform, saying that they were not reforms in the true sense of the word. Meanwhile, Nippon Keidanren (the Japan Business Federation), which officially announced its support for the Koizumi line which advocates the promotion of structural reforms, nevertheless pressed tough demands on the new Cabinet, such as realizing integrated reforms covering the tax, financial, and social security systems to boost economic vitality and international competitiveness, as well as promoting the employment of young people and stepping up educational reforms. Needless to say, integrated reform, not only of the pension programs but also of the social security system, is an extremely difficult challenge.

In any event, the biggest focus of the new Cabinet for the time being is the privatization of Japan Post, which some say is the centerpiece and priority issue of the structural reforms. The fate of the reshuffled second Koizumi Cabinet hinges on whether or not privatization can be carried out just as the government had planned, in ways that would satisfy Japan Post's labor force, its management, and the general public.