Japan PM seeks to reassure opponents of post reform
(Reuters)
Updated: 2005-08-02 11:56

Japanese Prime Minister Junichiro Koizumi, seeking to quell a party rebellion that could spark a snap election, said on Tuesday that privatising the postal system would not harm the interests of the people, Reuters reported.

Koizumi has said that rejection of his postal reform bills -- opposed by many in his own Liberal Democratic Party (LDP) -- would be tantamount to a vote of no-confidence, a tacit threat to call an election for parliament's powerful lower house.

The ruling coalition wants to call a vote in parliament's upper house on Friday, although opposition Democratic Party leader Katsuya Okada said a day earlier that the timing could well slip.

"I think that the post office network is an asset of the people," Koizumi told a special upper house panel.

"I realise there are concerns whether financial services such as savings and insurance can be retained in sparsely populated areas ... but we have provided the means so that such services will be provided as they are now," he said.

In a further effort at reassurance, he said reviews of all aspects of the privatised services would be carried out every three years.

"If there is found to be a problem....it will be fixed to conform with overall policy," he said.

On Monday, the battle with LDP rivals took a nasty turn when a lower house lawmaker committed suicide, apparently because he had been torn over whether to vote for or against the legislation.

REFORM CENTREPIECE

Legislation to privatise the postal delivery, savings and insurance system, including the world's biggest deposit-taking institution, is the centrepiece of Koizumi's reform platform.

Yoji Nagaoka, a lawmaker of the ruling Liberal Democratic Party (LDP) who opposed Japan's postal reform bills at an LDP party meeting but voted in favour in parliament, shouts banzai cheers as he celebrates a Lower House election victory at his campaign office in Sowa town, northeast of Tokyo in April 2003. [Reuters]

"I think that if you can't carry out reforms on this scale, anything larger is completely impossible," Koizumi said, in one of the more heated moments during Tuesday's debate.

But many LDP lawmakers have long relied on rural postmasters to get out the vote and on the postal savings funds for public works to keep constituencies happy.

They therefore oppose the privatisation bills, which would split up Japan Post and sell off its shares by 2017.

Boasting a network of almost 25,000 post offices and $3 trillion in assets, Japan Post does more than just deliver mail.

Japanese savers have made it the world's biggest deposit-taking institution and its life insurance business equals that of Japan's four biggest private insurers combined.

The privatisation bills were approved by parliament's lower house last month by a scant five votes and could be rejected in the upper chamber if 18 LDP members and all the opposition lawmakers vote against them.

In what could be a sign of the intense pressure, an LDP lower house member was found hanged at his Tokyo home on Monday in an apparent suicide, police said.

Yoji Nagaoka, 54, opposed the bills at an LDP party meeting but voted in favour in parliament.

Nagaoka's secretary was quoted by Kyodo news agency on Monday as saying he had been upset by the fact that some weekly magazines had called him a traitor for his actions.

Some opponents of privatisation blamed LDP executives for putting too much pressure on him to change his vote.

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