* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, June 3, 2012, Issue No. 664<br>
<br>+++ INDEX<br><br>- What's New -- Ozawa and Consumption Tax Consequences<br>- News -- Labor disputes at record high<br>- Upcoming Events<br>- Corrections/Feedback<br>- Travel Destinations Picks -- Chiba and Miyazaki<br>
- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br><br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br>
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e-mail us at <a href="mailto:info@pbxl.jp">info@pbxl.jp</a> or call us at 03-4550-2557<br><br>------------ PBXL is BUSINESS COMMUNICATIONS --------------<br><br>+++ WHAT'S NEW<br><br>As much as we don't like DPJ politician Ichiro Ozawa and <br>
his money-tainted politics, we have to agree with him on <br>one thing, that raising the consumption tax in Japan could <br>be harmful. Ozawa's public position is that consumption <br>tax is a regressive tax on the poor and that the government<br>
has not done enough to root out wastage in the <br>bureaucracies and should focus on that first. He has a <br>point. While the traditional argument is that consumption <br>tax is fairer because it requires everyone in the country <br>
to pay, not just salary earners, this argument is usually <br>presented in countries where there is a high level of <br>underground trading. <br><br>But Japan is both a highly compliant country in regards to <br>tax payment, AND, it has a lot of poor people who will be <br>
affected by the increase. Indeed, as of 2007, it had the <br>4th highest level of poverty amongst OECD countries and <br>there were at least 10m households below the poverty line <br>(JPY2m annual income). Shockingly, that accounts for 15% of<br>
Japan's kids. No wonder, then, that there has been some <br>talk of not charging consumption tax on some foodstuffs and<br>other essentials. You can review the child poverty issue at:<br><br><a href="http://www.japaninc.com/tt555_child_poverty_in_Japan">http://www.japaninc.com/tt555_child_poverty_in_Japan</a><br>
<br>But actually, the reason we think consumption tax will be <br>harmful to Japan is not because it will hurt the poor. Poor<br>people have been getting the rough end of the stick for <br>a long time. Rather, the problem is that a sudden influx of<br>
fresh cash will let the government engage in another 10+ <br>years of profligacy, encouraging them to put off hard <br>decisions that they should be making now. <br><br>A possible raise in consumption tax has been the "ace up <br>
the sleeve" for successive Japanese governments for a while<br>now, who look at the 22% rate in the UK and realize that <br>once you get the population used to the idea, admittedly <br>after a rough start-up period, then they accept it and <br>
you're done with worrying about whether sufficient <br>companies are earning profits and people are employed -- <br>so as to cover tax requirements. We're willing to bet that <br>the prospect of a flood of extra cash is the main reason <br>
why that the DPJ brought out a raft of vote-winning <br>policies -- such as handing out cash to families with kids,<br>and now a proposed minimum JPY70,000 pension. Both of these<br>moves are admirable from a social safety net point of view,<br>
but who's going to pay for them?<br><br>[Continued below...]<br><br>-- NAGAMINE & MISHIMA - Securing Your Success in Japan ---<br><br>Starting a new company in Japan? Looking to streamline<br>your current operations?<br>
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at 03-3581-1975 or by email at <a href="mailto:info@nagamine-mishima.com">info@nagamine-mishima.com</a>.<br><br>---------- YOUR BOTTOM LINE IS OUR TOP PRIORITY------------<br><br>[...Article continues]<br><br>Yes, a good question... Right now, to fund a budget of <br>
JPY90.33trn, the country expects income taxes to provide <br>about JPY36.92trn, while bonds, asset sales, and other <br>creative fund raising will take care of the rest. In fact, <br>this is the third year in a row where fund-raising through <br>
government bonds has exceeded tax income -- obviously an <br>unsustainable situation. Unfortunately, the annual deficit <br>is going to get worse. Not counting the proposed guaranteed<br>pension, the aging population is ratcheting up social <br>
security costs by an additional JPY1trn a year.<br><br>Therefore, it is no wonder that increasing the consumption <br>tax is such an attractive option. Taking the tax rate to <br>10% will bring in an additional JPY12.5trn annually to <br>
government coffers, while if it went to 20%, then the <br>amount would be about JPY37.5trn. Look forward 35 or so <br>years into the future, when there will be 20% less people, <br>and the income and expenditure numbers could conceivably <br>
balance. Therefore, our take is that once the government <br>locks in a 10% rate, something they are trying to do by <br>October 2015 (8% by April 2014), then it won't be long <br>before 15% or even 20% will be considered viable as well. <br>
Indeed, even Noda in a recent Keiyo University address said<br>that this might happen, although the government has since <br>pulled back from that position.<br><br>So, back to the profligacy argument. Ozawa is right that <br>
there are so many areas that the government could be <br>tightening up on its spending, before focusing on more <br>taxes. Just take a look at the ongoing public works, the <br>overkill in new regulations such as barring the sales of <br>
OTC drugs online, and worst of all, the thousands of <br>semi-governmental organizations sucking at governmental <br>income. These organizations are typically set up to <br>"support" various industries (with licence fees, <br>
registrations, certifications, etc.) but in reality exist<br>to provide Old Boys with jobs and high salaries. <br><br>A good example recently in the news is the Japan Atomic <br>Power Company (JAPC). This is an organization that was set <br>
up with government cash to build two nuclear reactors some <br>decades ago. This last fiscal year it was still levying its<br>power utilities customers 75% of its 2010 charges, thanks <br>to a fixed pricing system, even though it is only supplying<br>
4.6% of the power it was in FY2010. Meanwhile, the <br>utilities are deep in the red and struggling with the costs<br>of importing massive amounts of oil and LNG to fuel their <br>generators. JAPC has nicely positioned itself in the supply<br>
chain for power with TEPCO, and due to the fact it staffs <br>itself from the utilities (TEPCO's president Tsunehisa <br>Katsumata will join the board after resigning from TEPCO to<br>take responsibility for the Fukushima disaster), it clearly<br>
has the power to set its own pricing and policy agenda. <br>This kind of arrangement is really quite disgusting, and it<br>really makes you wonder where and when the government will <br>ever get the gumption to tackle such subtle corruption.<br>
<br>OK, so we concede that the DPJ did try for a while to <br>eliminate some of these special interest bloodsucking <br>organizations, but it has made very little headway <br>recently. Not unreasonably, they have been distracted by <br>
the earthquake and now by divisive politics. A recent poll <br>by by Kyodo News found that 72% of voters feel the same <br>way -- that the government has not done enough to eliminate<br>waste, and should focus on that before raising the <br>
consumption tax. Ozawa is a wily old fox and is tapping <br>into a deep well of public resentment over the issue.<br><br>If there is no consumption tax increase, then we believe <br>the government will hit the wall within 3-4 years in terms <br>
of being able to borrow on the local markets, and will have<br>to turn overseas for cash, at much higher interest rates. <br>There is a very good study from the Chicago University <br>website (<a href="http://bit.ly/KnWgUr">bit.ly/KnWgUr</a>) that posits the limit of government <br>
domestic borrowing will be when it uses up the net total of<br>the nation's household financial assets, which are expected<br>to decline to about JPY1,340trn in 2016. This will be the <br>year at which Government debt will be a larger number. <br>
<br>One wonders why Ozawa is being so obstinate on fighting an <br>increase in the consumption tax. Is it because he fears <br>that the DPJ will be kicked out of office by a public that <br>rejects the increase? We don't think so, since polls done <br>
on a regular basis indicate that 48%-58% (depending on the <br>poll) of voters already agree that an increase in <br>consumption tax is inevitable. Or is it simply that he is <br>playing a game of political chicken, and is trying to <br>
divide the party so that Noda gets kicked out and he can <br>step back in? Probably. <br><br>But if he does hold back the consumption tax decision, <br>although he wouldn't know it, he will probably be doing the<br>nation a huge favor, by precipitating national change. We <br>
say this because whomever wins the next election will <br>within their term be forced to resolve the fiscal imbalance<br>in one way or another. The Chicago University paper <br>speculates that the IMF may have to be called in to <br>
supervise a massive cut in spending and significant <br>increases in taxes, forcing Japan's political system to do <br>what it has been unwilling to do so far. <br><br>And maybe that's what is going to be required: a massive <br>
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<br>+++ NEWS<br><br>- Labor disputes at record high<br>- Olympus settles with Woodford in law suit<br>- Maverick Nomura shareholder suggests squat toilets<br>- L'Oreal to increase manufacturing in Japan<br>- Online games companies see stock plunge<br>
<br><br><br>=> Labor disputes at record high<br><br>The Labor Ministry says that employment disputes between <br>employees and employers rose 3.8% in FY2011, to hit 256,000<br>cases. About 20% of the cases revolved around claims of <br>
unfair dismissals, while 15% involved workplace <br>harassment. The other two most common disputes were over <br>worsening working conditions and early retirement <br>programs. ***Ed: It's clear from the numbers that small-to-<br>
medium sized firms are still under a lot of financial <br>pressure and are still downsizing.** (Source: TT <br>commentary, Jun 2, 2012)<br><br><a href="http://www.japantimes.co.jp/text/nn20120602f4.html">http://www.japantimes.co.jp/text/nn20120602f4.html</a><br>
<br>=> Olympus settles with Woodford in law suit<br><br>Olympus has apparently settled on a number in its <br>negotiations with former CEO Michael Woodford, after <br>Woodford's pursuit of an unfair dismissal claim. Although <br>
the terms are supposed to be kept confidential, Bloomberg <br>ran a story which speculated that Woodford was <br>seeking $60m, representing 10 years in lost income. <br>***Ed: Interesting how, given that the venue for the law suit <br>
was a London court, Olympus caved in so quickly to <br>Woodford's demands. They certainly don't need more time<br>under the media spotlight as they struggle to survive the<br>scandal.** (Source: TT commentary from <a href="http://bloomberg.com">bloomberg.com</a>, <br>
May 29, 2012)<br><br><a href="http://bloom.bg/KI3mBm">bloom.bg/KI3mBm</a><br><br>=> Maverick Nomura shareholder suggests squat toilets<br><br>In keeping with the Japanese commercial code, which allows <br>Nomura shareholders with at least 30,000 shares and who <br>
have held them for longer than 6 months, to submit <br>proposals at the company's AGM, a shareholder submitted <br>around 100 humorous suggestions. They included one that <br>would have required company office toilets to be converted <br>
back to Japanese traditional squat toilets, so that <br>managers could "toughen their legs and loins on a daily <br>basis" so as to increase the company stock price. He also <br>suggested renaming Nomura as Vegetable Holdings. ***Ed: <br>
Although the suggestions didn't fly, we're sure they both <br>drew more than a few grunts of agreement amongst other<br>shareholders, given that Nomura's stock price has been <br>under JPY1,000 since 2008.** (Source: TT commentary from <br>
<a href="http://reuters.com">reuters.com</a>, Jun 1, 2012)<br><br><a href="http://reut.rs/KtblDA">http://reut.rs/KtblDA</a><br><br>=> L'Oreal to increase manufacturing in Japan<br><br>It's good to see that French cosmetics firm L'Oreal has <br>
sufficient confidence in Japanese manufacturing that it is <br>going to double production at its Gotemba, Shizuoka-ken <br>factory. The company says that its Asia-Pacific sales have <br>jumped 13% to JPY3.6bn Euros in FY2011, and it wants the <br>
extra product for SE Asia and China. Apparently the Shu <br>Uemura brand has been particularly strong for L'Oreal, with<br>sales up around 20%. (Source: TT commentary from <br><a href="http://e.nikkei.com">e.nikkei.com</a>, Jun 2, 2012)<br>
<br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120601D0106A21.htm">http://e.nikkei.com/e/ac/tnks/Nni20120601D0106A21.htm</a><br><br>=> Online games companies see stock plunge<br><br>Just 3 weeks ago darlings of the Japanese stock market, <br>
both DeNA and Gree are now seen as overpriced after a <br>government announcement that it would ban a lucrative part <br>of both companies' businesses, called "Complete Gacha". The<br>banned practice involved people buying virtual weapons and <br>
tools at an online shop, but where the assets were provided<br>at random, thus introducing a gambling experience for the <br>gamer. ***Ed: We think the sell-off is over done, and that <br>both firms still have an incredible penetration and <br>
understanding of the Japanese gaming market and are able to<br>create new flows of revenue.** (Source: TT commentary from<br><a href="http://e.nikkei.com">e.nikkei.com</a>, Jun 1, 2012)<br><br><a href="http://e.nikkei.com/e/ac/tnks/Nni20120601D01SS170.htm">http://e.nikkei.com/e/ac/tnks/Nni20120601D01SS170.htm</a><br>
<br><br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>apologize for the inconvenience.<br><br>***------------------------****-------------------------***<br>
<br>+++ CANDIDATE ROUND UP/VACANCIES<br><br>=> BiOS, a Division of the LINC Media group, is actively<br>marketing the following positions for customers setting up<br>or expanding in Japan, as well as other employers of<br>
bilinguals.<br><br>** HIGHLIGHTED POSITION<br><br>BiOS is looking for a Senior Desktop Support Engineer for <br>our client, a global bank in Chiyoda-ku, Tokyo. The <br>candidate will be responsible for standard desktop user <br>
calls, taking calls from field sales staff on issues from <br>Laptops to iPhones, and aiding or taking any queries up to <br>Support Level 3. There will also be ad-hoc floating support<br>duties, client PC installation and set-up, and <br>
troubleshooting MDS software like Bloomberg.<br><br>Due to the technical nature and demanding work environment,<br>this position is suitable for someone with 4+ years of <br>experience as a desktop engineer and experience with MDS <br>
software like Bloomberg. In addition, since this role <br>requires direct coordination with both regional and global <br>IT teams, Fluent Japanese and English will be required.<br><br>Remuneration is JPY6m – JPY7m depending on your experience <br>
and skill level.<br><br>** POSITIONS VACANT<br><br>- Proj. Mgr, International Telco, JPY6M – JPY7.5M<br>- Data Center Sales, DC co. in Tokyo, JPY5M – JPY8M<br>- Field Engineer (Data Center), intnl DC co., JPY4M – JPY5M<br>
- Senior Support Engineer, BiOS, JPY5M – JPY6M<br>- Server Engr (Data Center), DC Co., JPY5M – JPY8M<br><br>** BiOS Job Mail<br><br>Every 2 weeks BiOS sends out a regular communication to its<br>job seeking candidates, called BiOS Job Mail. Every edition<br>
carries a list of BiOS's current and most up-to-date<br>vacancies, with each entry featuring a short job<br>description and a direct link to the main entry on the BiOS<br>home page. Regardless of whether you are unemployed and<br>
searching, thinking about a career change, or just curious<br>to know if there is something out there that might suit you<br>better, the BiOS Job Mail newsletter is an easy and<br>convenient way for you to stay informed. If you would like<br>
to register for the BiOS Job Mail, or to find out more,<br>please email <a href="mailto:jason.kisling@biosjp.com">jason.kisling@biosjp.com</a>.<br><br>Interested individuals may e-mail resumes to:<br><a href="mailto:jason.kisling@biosjp.com">jason.kisling@biosjp.com</a><br>
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company in Tokyo, BiOS offers some of the most competitive<br>services available to multinationals whether large or<br>small.<br><br>Data Center staff and managed services, Help Desk, desktop,<br>and network support. Server virtualization, cloud computing<br>
hosting and solutions, general software development.<br><br>For more information on these and other SI and IT services,<br>in English or Japanese:<br><br>Phone: (03) 4588-2220, Email: <a href="mailto:solutions@biosjp.com">solutions@biosjp.com</a><br>
Web: <a href="http://www.biosjp.com">www.biosjp.com</a><br>-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ UPCOMING EVENTS/ANNOUNCEMENTS<br>
<br>=> No events this week.<br><br>***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>by readers. We encourage you to spot our mistakes and<br>
amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br><br>=> No feedback this week.<br><br>***------------------------****-------------------------***<br><br>----------- Experienced Biz Dev/Interpreter --------------<br>
<br>Ex-investment banker, venture capitalist and current biz<br>dev expert seeks part-time work as interpreter and market<br>development consultant. Knowledgeable in finance, web,<br>technology, and media sectors, with additional experience<br>
in other areas. Good at analyzing problems, creating<br>strategies to get into target firms, and just getting the<br>job done. Native Japanese, high-level English, competent<br>presentation skills.<br><br>Based in Tokyo, available for immediate assignment, OK <br>
with short-term projects. Contacting me for a preliminary<br>meeting and quotation for services is free.<br><br>For more information, contact: <a href="mailto:bigred461696@gmail.com">bigred461696@gmail.com</a><br>-----------------------------------------------------------<br>
<br>***------------------------****-------------------------***<br><br>+++ TRAVEL DESTINATIONS PICKS<br><br>=> Onjuku Town and Beach -- A little bit of Latin in Chiba<br><br>Onjuku is close to Tokyo, therefore cheap and convenient, <br>
but still has a lot to offer the casual traveler. The <br>little town harbors a unique culture; in 1609 a Spanish <br>galleon named the San Francisco ran ashore near Onjuku and <br>the surviving crew and captain were cared for by the <br>
Japanese women of the town. They were later offered a ship <br>to return to Mexico. Now, tourists to the region can admire<br>a monolith, overlooking the sea, built to commemorate the <br>relationship between Mexico and Japan, but that’s not the <br>
only Mexican influence you can see within the town. Cute <br>lobsters adorning sombreros are everywhere, along with a <br>cactus tree that welcomes beach-goers.<br><br><a href="http://japantourist.jp/view/a-little-bit-of-latin-in-chiba">http://japantourist.jp/view/a-little-bit-of-latin-in-chiba</a><br>
<br>=> Jingu Shrine, Nature Museum, Miyazaki<br><br>With Miyazaki being blessed by a good climate, lovely <br>mountain scenery, and spectacular ocean views, many <br>tourists head right out of town as soon as they land. Yet <br>
located only a short bus, train or taxi ride away from <br>Miyazaki station, the shrine is a must see for those in the<br>know. At the same time, the museum—located on the same <br>grounds, is often missed, as you have to make your way all <br>
the around the park before you come to it.<br><br>The shrine is dedicated to Japan’s first Emperor Jimmu, who<br>most historians believe to have been a mythical figure. Set<br>in a cedar forest, the shrine’s buildings are almost all <br>
constructed of cedar as well. One distinguishing feature of<br>the shrine (and that of the adjacent Gokoku Shrine) is the <br>presence of chickens wandering around the grounds. The <br>Shrine is popular with bird (and not just chicken) lovers, <br>
and you can also see a 400-year old Wisteria in the Toshin <br>garden.<br><br><a href="http://japantourist.jp/view/jingu-shrine-nature-museum">http://japantourist.jp/view/jingu-shrine-nature-museum</a><br>***------------------------****-------------------------***<br>
<br>***********************************************************<br>END<br><br>SUBSCRIBERS: 8,081 members as of June 3, 2012<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
<br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
instructions.<br><br>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.<br><br>ADVERTISING INFORMATION<br>For more information on advertising in this newsletter,<br>
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or, <a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br><br>Copyright 2012 Japan Inc. Communications Inc.<br><br>----------------- Japan Inc opens up Japan ----------------<br>
<br>J@pan Inc is Japan's only independently published English-<br>language business website. Authoritatively chronicling<br>online the business trends in Japan, each posting brings<br>you in-depth analysis of business, people and technology in<br>
the world's second largest economy.<br><br>Visit <a href="http://www.japaninc.com">www.japaninc.com</a> for the best business insight on<br>Japan available.<br>-----------------------------------------------------------<br>
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