Japan’s new government on Friday urged caution on a proposal for a global tax on banks to pay for future bailouts.
Asked about the contentious bank tax, a spokesman for new Prime Minister Naoto Kan said countries must be very careful not to apply across—the—board regulatory measures.
A “one—size—fits—all kind of approach may not be productive,” Kazuo Kodama, press secretary for Japan’s foreign ministry, told reporters on the sidelines of this week’s global economic summits of the Group of 8 and Group of 20 countries.
Mr. Kan, who is making his diplomatic debut as prime minister, also believes that strong economic growth can be encouraged even as officials make the financial reforms needed to guard against future economic turmoil, Mr. Kodama said.
Bank tax plan proves divisive
The issue of a bank tax meant to shield the public from the cost of resolving future financial crises has proved divisive among the nations gathering in Canada.
The G—20 includes the world’s wealthiest industrial countries, plus major developing nations such as China, India and Brazil; it was designated last year as the top policy—setting group for dealing with global financial issues.
The G—8 groups France, Germany, Italy, Japan, the United Kingdom, the United States, Canada and Russia.
The United States, Britain, France and Germany back the bank tax. Countries such as Canada and Australia, where banks survived the global crisis intact, oppose it.
Japan has ambitious goals
In Japan, Mr. Kan’s government has laid out ambitious goals to provide for an aging, declining population and to contain its growing public debt, which last year reached 218.6 percent of its gross domestic product, according to the International Monetary Fund.
Japan aims to cut in half the annual budget deficit as a percentage of its economy by 2015. It also wants to reduce total public debt, reconstruct the country’s social security system, and oversee comprehensive tax reform.
Mr. Kan will use the G—20, which represents 85 percent of the global economy, to press for climate change action and to lobby for rich nations to follow through on pledges to help developing countries with aid, Mr. Kodama said.
Japan wants an early adoption of a legal document that can be used as an international climate change framework for major emitters of greenhouse gasses, including the United States and China, Mr. Kodama said.
Mr. Kan on Friday also discussed a nuclear standoff in North Korea and the war in Afghanistan in meetings with Canadian Prime Minister Stephen Harper and German Chancellor Angela Merkel.
Mr. Kodama said Japan supports South Korea’s efforts to seek punishment in the U.N. Security Council over the sinking.
Japan also pledged to contribute $500 million over a five—year period starting next year to a G—8 initiative to improve maternal and infant health care in poor countries.