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In the beginning of FY 1998 long-terms debts will total 27.8
trillion yen if revenues reach the budgeted amount for FY 1997.
On the other hand, the Settlement Corporation is only expected to pay 4.5
to 5.5 trillion yen from the disposal of assets. There is no doubt about the
failure of the current scheme under which the Settlement Corporation must repay
the long-term debt from its own financial resources. It is necessary to expedite
the full-fledged settlement of long-term debts as soon as possible. This problem
is one that cannot be prolonged any further.
At the Cabinet meeting in December 1996, the government decided to launch
the full-fledged settlement of the long-term debts from FY 1998 and to work
out a specific plan for a full-fledged settlement by the end of 1997. Furthermore,
at the meeting in June 1997, the Cabinet stressed that it was indispensable
to thoroughly settle the long-term debts of the JNR in order to realize the
fiscal structural reform.
Each political party also set up a study group in which the issue is being
intensively deliberated.
Based on these moves, the Ministry of Transport has clearly positioned the
JNR long-term debts as debts to be borne by the government, and therefore to
be mainly settled by the government as well. Accordingly, the Ministry has asked
for the necessary budget appropriations for launching the settlement of debts
from FY 1998.
Though many possible measures for settling the long-term debts have come
under review so far, we should strictly refrain from taking the easy way out
by delaying the settlement of long-term debts and burdening them on future generations.
The Cabinet meeting (June 1997) decided to examine all possible measures for
JNR long-term debts settlement and formulate specific measures by the end of
1997.
From this perspective, as of October 1997, the Planning Committee of the
Conference on Fiscal Structure Reform composed of both government officials
and ruling party members have been making serious deliberations. By the end
of 1997, the committee will formulate a final settlement plan which can secure
the understanding of the taxpayers.
At the Cabinet meeting that took place February 1995, it was decided that
at the point in time when the Settlement Corporation will have fulfilled its
main responsibility of settling the long-term debts and the disposal of assets,
the Corporation will be disbanded after ensuring new employment of its employees.
The number of employees will be reduced to half the current level by the
end of FY 1998, and the branch offices will be amalgamated or closed. With the
cooperation of related organizations, the utmost effort is being expended in
a bid to secure new employment for former employees.
The government has decided to extend non-interest bearing loans from the general account to cover FY 1997 borrowings (about 3 trillion yen), as a measure to prevent the Settlement Corporation from increasing its accumulated interest payment burden. Through these efforts the government hopes to reduce the interest payment of the Settlement Corporation.
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