Japanese Prime Minister Points to ‘Assets Gap’ : Kaifu Pledges to Work for Home Affordability

“A widening disparity between the haves and the have-nots,” caused by skyrocketing land prices, “has robbed the people of their dream of home ownership,” Prime Minister Toshiki Kaifu told the Japanese Parliament on Monday.

Pledging to work toward “a fair society” in Japan, Kaifu promised to tackle the land problem and to “take consumer interests into account in the drafting and implementation of all our policies.”

Kaifu, delivering his first policy speech to Parliament since taking office Aug. 9, offered no specifics. Yet this was the first time that a Japanese leader had pinpointed a growing “assets gap” and consumer interests as key governmental issues.

Support Falls

In early September, at the beginning of U.S.-Japan negotiations designed to remove structural impediments to trade between the two countries, Bush Administration officials urged Japan to curb land prices and “give consumers a fair break” to remove barriers to imports.

Kaifu said in his speech that “the extraordinary rise in land prices has been a factor shaking the people’s faith in society’s fairness.” He said his government will take measures to curb speculation and “disallow exorbitant profits from land trading.”

In September, a poll by the newspaper Nihon Keizai found that middle-class support for Kaifu’s Liberal Democratic Party had fallen nearly 10% in the last year, to 38.8%, because of a widening assets gap caused by a privileged few reaping windfall profits from soaring land and stock prices.

The newspaper cited dissatisfaction over the assets gap as one of the basic causes of the Liberal Democrats’ defeat in a July election for members of Parliament’s upper house.

An ‘Importing Giant’

“Japan has come to be regarded as one of the wealthiest of nations,” Kaifu said. “Yet do we Japanese have an inner sense of fulfillment? . . . The time has come to work in humble pursuit of a fair and spiritually rich society.”

He intends to transform his country into an “importing giant,” he said, and “if there are factors preventing consumers from enjoying comforts commensurate with Japan’s economic development, we will eliminate them.”

He pledged support for U.S. requests--without identifying them as such--that Japan “promote competition through deregulation, create a rational distribution system and reduce the disparities between domestic and international prices.”

Without specifically referring to recent sex scandals and widespread influence buying by Recruit Co., an information and real estate conglomerate, he said: “Restoration of trust in politics is this Cabinet’s most important task.”

He pledged to overhaul the Japanese electoral system, to reapportion seats in Parliament and reform political funding. He set November, 1990, the centennial of the establishment of Parliament, as a target date for implementation of the reforms.

Kaifu spoke at the beginning of a special session of Parliament in which opposition parties, which now control the upper house, have submitted bills to abolish a 3% consumption tax that the Liberal Democrats implemented last April 1. Analysts have said Kaifu may dissolve the lower house and call a general election during the special session, which is scheduled to end Dec. 16. By law, an election must be held by next July.

Although Kaifu promised to rectify inequities in the consumption tax, he said the tax is “absolutely indispensable” to finance welfare programs as Japan’s society ages. “I have no plans to abolish it,” he declared.