On June 21, the 9th Council on Economic and Fiscal Policy and the 29th Council on New Form of Capitalism Realization were held jointly at the Prime Minister’s Office. During the meeting, discussions were held on “The draft Grand Design and Action Plan for a New Form of Capitalism 2024 (Revised)” and “The draft Basic Policy on Economic and Fiscal Management and Reform 2024,” and both were finalized. Ms. Yoshino, President of the Japanese Trade Union Confederation (RENGO) and a member of the Council on New Form of Capitalism Realization, attended the joint meeting and expressed her views on behalf of the Japanese labour community.

The Grand Design for New Capitalism presents a vision and philosophy aimed at achieving sustainable development of society and economic growth simultaneously. This approach emphasizes not only economic growth, but also social equity and environmental sustainability.

On the other hand, the Basic Policy on Economic and Fiscal Management and Reform outlines the fundamental direction for the Japanese government’s economic and fiscal management each year, providing the basic framework for budget formulation and tax reforms.

The two are often formulated in a coordinated way, and policies to realize the principles of the New Capitalism are embodied in the Basic Policy. In this way, the Grand Design and Action Plan for the New Capitalism and the Basic Policies on Economic and Fiscal Management and Reform serve as a framework to achieve effective economic management by linking the government’s long-term goals with short-term policy measures.

One of the main pillars of “The draft Grand Design and Action Plan for a New Form of Capitalism 2024 (Revised)” is the “early implementation of comprehensive labour market reform,” which consists of: (1) the introduction of job-based human resource management; (2) the facilitation of labour mobility; (3) support for fostering workers’ capabilities through reskilling; and (4) other related matters of labour market reform. RENGO President Yoshino made comments on these issues.

< Summary of President Yoshino’s remarks >

〇 Regarding “comprehensive labour market reform” aimed at sustainable and structural wage increases, it is necessary to promote an integrated approach that includes not only skill development but also the enhancement of safety net functions, the proper conduct of transactions, and the establishment of rules to protect workers.

〇 Additionally, concerning the introduction of job-based human resource management, labour mobility, and the facilitation of M&As and private arrangements, it is crucial to have labour–management consultations and to reflect workers’ intentions based on the actual workplace conditions of each industry and occupation, with the fundamental premise of protecting workers.

〇 Furthermore, a system of monetary settlements for dismissals should not be introduced under any circumstances, as it could promote unfair dismissals.

The draft Grand Design and Action Plan for a New Form of Capitalism 2024 (Revised) is composed of the following items:

1) Establishing wage increases for workers in small- and medium-sized enterprises as an investment in people

2) Early implementation of comprehensive labour market reform focusing on three key areas

3) Facilitating industry innovation through the smooth entry and exit of companies

4) Promoting investment

As such, it encompasses a wide range of areas.

Although there are many difficulties and challenges in implementing these policies, we hope that the current recommendations of RENGO will be reflected in the labour sector.