Stressing the need for tax reform to restore the country's battered finances, Prime Minister Naoto Kan vowed Friday in his first policy speech to the Diet that he will exert strong leadership to overcome Japan's economic struggles.

Specifically, Kan called on opposition parties to jointly launch a panel to discuss ways to restore the fiscal balance.

Kan did not specifically touch on the consumption tax, although he has indicated raising the unpopular levy will be inevitable to overcome the country's snowballing public debt and ballooning social security costs.