Koizumi set to push ahead with postal reform

Japan’s ruling coalition is expected to achieve a key ambition of Prime Minister Junichiro Koizumi this week by passing legislation to privatise the country’s sprawling postal service and create the world’s largest private bank.

Parliament’s lower house may take up the Bills and approve them as early as Tuesday, setting up a vote in the upper house by week’s end, the Nihon Keizai newspaper said on Monday. Koizumi opened a special session of Parliament on September 21 in part to push through the reforms.

Though the upper house rejected a version of the Bills earlier this year, some previous opponents are expected to support them this time following Koizumi’s landslide victory in September 11 elections, which he billed as a referendum on postal reform. The win also handed his ruling coalition a two-thirds majority in the

lower house—enough to override any rejection by the upper chamber.

The Bills were submitted to the legislature last week by Koizumi’s Liberal Democratic Party and its junior coalition partner, the New Komei Party.
The plan would split up Japan Post’s delivery, insurance and savings deposit services and sell them off by 2017. The privatisation process would begin in late 2007 and

create the world’s largest private bank.

The main opposition Democratic Party of Japan offered an alternative Bill that would keep mail delivery and bill payment services under government control, but reduce the 330-trillion yen ($3-trillion) in savings and insurance deposits controlled by the state.

But the DPJ’s legislation is unlikely to be approved since the Democrats have only 113 seats in the 480-member lower house.

Koizumi has devoted much of his time as prime minister to postal reform, battling interests in his own party—which once depended on the vast network of unionised postal workers as a bastion of rural support.

He says reform is needed to open up the postal service’s huge deposits to more efficient investment, providing a jump-start for a country that is only now emerging from a lengthy slowdown triggered by the bursting of the 1980s “bubble economy”.

In August, Koizumi dissolved Parliament and called snap elections when the earlier version of the privatisation Bills was defeated in the upper house with the help of renegade LDP members—whom he kicked off the party ticket in favour of pro-reform candidates to clinch a victory in the September polls.

Many of the rebels have since said they will back the reforms this time, including Seiko Noda, a former LDP member who was a leading opponent in the lower house.

“The Bills may not be perfect, but the election results have shown the public wants reform to speed up,” Kyodo News service quoted Noda as saying on Sunday.

Koizumi has said passing postal reform will clear the way for him to push ahead with other reforms, including tackling the country’s ailing pension system and rebuilding government finances.

The government must also debate the country’s dispatch of about 550 noncombat troops to Iraq, where they are engaged in reconstruction and humanitarian aid projects. That mission expires on December 14 and an extension requires approval by both houses of Parliament. - Sapa-AP

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