Bills to privatise Japan's postal system, including the world's largest savings bank, were passed by parliament's lower house today, setting the stage for Prime Minister Junichiro Koizumi to achieve the core of his reform agenda.
Under the legislation, Japan Post, which has 25,000 post offices, 260,000 employees and some $3 trillion in assets, would be split into four entities and privatised in October 2007. A newly created holding company would sell all shares in the postal savings and life insurance businesses by the end of March 2017.
Koizumi, 63, has been advocating reform of the postal system for most of his three-decade-long political career. Privatising the mail delivery, savings and insurance system fits squarely into his agenda of weaning the Liberal Democratic Party from its addiction to wasteful public spending that won votes from vested interests but spawned repeated scandals and inflated government debt.
Japan Post has been a major buyer of Japanese government bonds as well as a source of funds for public works.
