With the resounding victory of the Liberal Democratic Party in the general election, Prime Minister Junichiro Koizumi can now boldly kick-start the stagnant process of structural reform. Utilizing the strong leadership consolidated in the triumph, Mr. Koizumi must set about breaking up the LDP cliques and the vested interests ensconced in the bureaucracy, and show concrete results in reform.
As he has said, the first task is to enact the postal privatization bills, now a comparatively easy goal. It is also important for the government to quickly point the way toward fiscal reconstruction, which should become the framework of a "reformed" Japan and be the premise for other individual policies.
Even under the Koizumi administration, the issue of government bonds has remained at a high level of 30 trillion yen or so every year. Outstanding debt amounts to 538 trillion, yen a figure equivalent to 12 years of tax revenue. This is a deplorable situation. Moreover, while faced with such a crisis, the government compiled a budget for the current fiscal year in which the general account budget (funds for regular operation of government offices) is not covered by tax revenues alone.
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