Postal Privatization Was a Major Failure of the Liberal Democratic Party

Do you, the readers of this article, think that postal privatization was a success?
Or do you think it was a failure?
Ibelieve it was a "major failure."

The "structural reform without sanctuaries" led by the Junichiro Koizumi administration (2001–2006) and Heizo Takenaka, the mastermind of its economic policy, was a turning point that fundamentally changed the nature of the Japanese economy. To prove the "points of failure" of postal privatization, it is necessary to compare the original objectives with the current reality and analyze the structural flaws.

1. Background of the Koizumi-Takenaka Line: Introduction of Neoliberalism

At the time, Japan was in the midst of the "Lost Decade" following the collapse of the bubble economy and was burdened with massive non-performing loans. Heizo Takenaka adopted neoliberal methods that emphasized "supply-side efficiency" and promoted the following three pillars.

• Disposal of non-performing bank loans: Injection of public funds into banks and strict asset assessment

• Deregulation and privatization: "From public to private," "From central to local government"

• Fluidization of the labor market: Expansion of non-regular employment (e.g., lifting the ban on temporary staffing in the manufacturing sector)

The symbol of this wasthe "postal privatization" to channel the 350 trillion yen of national savingsfrom "public to private."Postal privatization The "private" refers to the foreign capital firm Goldman Sachs.

2. Four perspectives proving the "failure" of postal privatization

I will organize the points where postal privatization did not proceed according to the original ideals or where it caused negative consequences.

① "From public to private" became a conduit for "from public to foreign capital."

The biggest point of criticism is the exit strategy for the massive funds held by the postal service (postal savings and Kampo life insurance).

• Reality: After privatization, funds from Japan Post Bank and Kampo Life Insurance became more easily directed toward purchasing U.S. Treasury bonds and forming partnerships with foreign financial institutions rather than investing in domestic Japanese industries.

• The 350 trillion yen in assets is currently managed by Goldman Sachs.

• Result: The assets of the Japanese people were not used for domestic growth strategies but were instead used to serve the profits of global financial capital.

② The collapse of universal service and the decline of rural areas

The postal business had a legal obligation to provide "nationwide uniform services (mail, savings, and insurance)," but the emphasis on profitability following privatization eroded this.

• Reality: While post offices in urban areas were maintained, the maintenance costs for post offices in depopulated areas became a burden.

• Result: In rural areas, post offices served not only as logistics hubs but also as places for monitoring the elderly and as administrative service counters; however, due to staff reductions and the downsizing of counters, the foundation of local communities has been weakened.

3. Management Chaos and Organizational Fragmentation (The Harmful Effects of the Four-Way Split)

The Koizumi administration split the organization into four entities: "Japan Post Service," "Japan Post Network," "Japan Post Bank," and "Japan Post Insurance."

• Reality: The integrated management that once existed became impossible, and coordination costs between the companies increased. Furthermore, the pursuit of profit created a breeding ground for scandals driven by a "quota-first" mentality, such as the improper sales of Japan Post Insurance products.

• Result: What was intended to improve efficiency instead produced the opposite results: organizational bloat and a lack of compliance.

4. The Reallocation of Vested Interests Under the Guise of "Privatization"

The logic championed by Mr. Takenaka and others—that "privatization would increase efficiency"—was, in reality, a fire sale of public assets.

• Reality: It did not become a fully private enterprise; instead, an unstable "semi-public, semi-private" state has persisted for many years, with the government still holding a large amount of shares.

• Result: A half-baked structure was solidified, where neither free private management nor public peace of mind could be fully realized.

3. The Price of "Structural Reform" as Seen Through Economic Indicators

Looking back at the Koizumi-Takenaka reforms as a whole, the following negative aspects are prominent.

Indicator/Item Impact of Reform
Widening Inequality:The explosive increase in non-regular employment has turned the working poor into a social issue.
Entrenchment of Deflation:Wage suppression and oversupply continued, causing the opportunity to escape deflation to be missed.
Regional Devastation:The reduction of local allocation tax grants due to the "trinity reform" dealt a major blow to regional economies.

Conclusion: What Was the Biggest Mistake?

The biggest mistake of postal privatization lies in the fact that they attempted to separate the "public network (post office network)" and the "massive financial assets (postal savings and insurance)" based solely on efficiency metrics.

As a result of throwing the post office's function as a "safety net" into market logic, the resilience of Japanese society was eroded, and much of the fruits of this were drained overseas rather than being reinvested domestically. It must be evaluated as a historical decision that damaged the nation's long-term wealth.
Insurance was quietly replaced by Aflac and others, wasn't it?

Major Scandals Caused by the Japan Post Group

When organizing these scandals, the "structural disease" born from organizational bloat and unreasonable profit-seeking becomes clear. Below is a summary of representative scandals and their "causes and background."

1. Improper Insurance Sales by Japan Post Insurance and Japan Post (2019–)

This is the group's largest scandal, which shook society the most.

• Content: When having customers (especially the elderly) cancel old insurance policies to switch to new ones, they intentionally caused "double payments" and "periods without insurance coverage."

• * Excessive quotas: To cover the deficit in the postal business, extremely strict targets were imposed for the sale of financial products.

• Disconnect between the front lines and management: Voices pointing out misconduct on the front lines were silenced by measures such as social media bans, and management downplayed the reality of the situation.

2. Japan Post Bank unauthorized withdrawal issue (2020)

• Details: Deposits at Japan Post Bank were illicitly withdrawn by third parties through electronic payment services such as "Docomo Account."

• Low risk sensitivity: They left weak multi-factor authentication in place, and their initial response after the damage occurred was passive, claiming that "the damage is the responsibility of the payment service provider." Their stance of prioritizing the avoidance of their own liability over customer protection was criticized.

3. Customer information misuse incident (2024–2025)

• Details: It was discovered that approximately 10 million customer data records from Japan Post Bank had been diverted for Japan Post Insurance sales activities (such as sending direct mail) without the customers' consent.

• Lack of governance: In their eagerness to prioritize "group-wide sales," they neglected compliance with laws such as the Personal Information Protection Act, revealing that the corporate culture of "selling even if it means ignoring the rules" for the sake of organizational defense has not been improved.

4. Massive fraud incident by postmaster-level staff (Nagasaki, 1.2 billion yen, etc.)

• Details: A former postmaster of the Nagasaki Sumiyoshi Post Office lied to customers, claiming there was a "special savings account with a high interest rate," and defrauded them of a total of approximately 1.2 billion yen over more than 20 years.

• The sanctuary of the Postmasters' Association: By having certain influential postmasters remain at the same office for long periods, a state of "extraterritoriality" was created where internal audits did not function. This was underpinned by structural collusion that betrayed the trust of local residents.

5. Management and investment failures: Reckless global strategy

• Massive impairment loss of Australia's Toll Holdings (2017)

  • Details: The Australian logistics company, acquired for approximately 600 billion yen, incurred a loss (impairment) of 400 billion yen in just two years and was ultimately sold for a small amount.

  • Despite lacking the ability to discern the actual state of overseas management,they made a superficial management decision that "global expansion is necessary because we have privatized." The assets of the people were effectively lost.

  • The assets of the people were effectively lost.

Thorough Analysis: Why did it become so "corrupt"?

The flaws of the Japan Post Group visible from these scandals can be summarized in the following three points.

1. The rigidity of the "bureaucracy" disguised as the "private sector"

While privatization demands profitability, the organizational culture retains the worst aspects of bureaucracy: "orders are absolute" and "cover up inconvenient truths." This has stifled transparency and become a hotbed for scandals.

2. An unsustainable business model

As long as the postal business is structurally in the red, it must be supported by financial fees from Japan Post Bank and Japan Post Insurance. This structure of "the child (Japan Post) supporting the parent" continues to create harsh quotas for the front lines and incentives for misconduct.

3. The "constraint" of universal service

Because there is an obligation to "provide the same service everywhere in the country," there is a limit to efficiency. This public mission and the pursuit of profit as a private company are in fierce contradiction, and the distortion manifests entirely as "burden on the front lines" and "scandals."

This conveys the state of press conferences regarding past scandals at the Japan Post Group (especially the 1 billion yen fraud case) and is useful for understanding the governance issues and internal control deficiencies of the organization in concrete terms.

Thorough Analysis: What was the "failure" of the Japan Post Group?

Looking at this series of scandals as a whole, three decisive "failures" emerge.

1. A hybrid of "private" quotas and "bureaucratic" irresponsibility

Through the Koizumi-Takenaka reforms, "profit-seeking like a private company (quotas)" was introduced, but the organization remained a "bureaucratic organization that dislikes change." As a result, the worst culture of "meeting impossible numbers handed down from above with lies and fraud" became entrenched.

2. The dual-structure dominance of the "Postmasters' Association"

An organization called the "Postmasters' Association," which holds political power separate from the corporate structure, continues to wield immense authority. Because even the management team caters to the Postmasters' Association,a collapse of governance is occurring where the top of the organization cannot control the front lines.

3. A broken business model

With digitalization reducing mail volume and low interest rates making financial earnings difficult, the act ofdumping the responsibility onto the front lines to "handle it yourself"to cover this structural deficit is the root cause of inappropriate sales to the elderly and misconduct.

Issues at Japan Post (Japan Post Co., Ltd.)

The issues of drunk driving, fraudulent roll calls, and punitive cycling are deeply rooted scandals resulting from a lack of organizational safety management combined with harsh working environments that push frontline workers to their limits.

1. Normalization of Drunk Driving and Fraudulent Roll Calls

At Japan Post worksites, there have been successive cases of drunk driving by postal workers across the country, and "fraudulent roll calls" to cover them up have also been uncovered.

• Details:

  • Drunk Driving: Cases where alcohol was detected in accidents during delivery, as well as drinking before shifts or during breaks, have been reported repeatedly.

  • Fraudulent Roll Calls: Acts were systematically carried out where others performed the alcohol breathalyzer checks that should have been done by the individual themselves, or records were marked as "passed" even though the checks were not conducted.

  • Prioritizing "On-Time Departure" over "Safety": There was a culture where strictly adhering to postal delivery schedules was the supreme command, and there was a dislike for taking time for roll calls.

  • Hollowed-out Check Systems: This is the harm of "formalism," where managers do not grasp the reality of the worksite while overseeing a vast number of contractors and non-regular staff, prioritizing only the alignment of numbers on paper.

Management Responsibility and Disciplinary Action: The Inescapable "Revocation of Business License"

In 2025, the Ministry of Land, Infrastructure, Transport and Tourism issued an extremely rare disciplinary action against Japan Post, the heaviest in the transport industry: "Revocation of General Motor Truck Transportation Business License." Following this, the management team was also held strictly accountable.

Details of Disciplinary Action Against Executives

• Return of Compensation and Salary Reductions: Disciplinary action was taken against the executives in charge, including the then-President of Japan Post (Mr. Tetsuya Senda), requiring them to return 10% to 30% of their monthly compensation for several months.

• Location of Responsibility: The greatest responsibility was attributed to a lack of governance, where the attitude was "as long as the paperwork is in order, it is fine," failing to grasp the actual situation on the ground.

• Resignation and Departure: Taking responsibility for the series of disruptions, some executives in the logistics department and those in charge of compliance were effectively forced out or resigned.

Number of Vehicles Rendered Unusable

Due to this scandal, Japan Post was subjected to vehicle usage restrictions on an unprecedented scale.

• Vehicles rendered unusable: approximately 2,500

  • Breakdown: Trucks and vans of 1 ton or more (for general freight motor vehicle transportation business)

  • Disposal details: Received a "revocation of business license" from the Kanto District Transport Bureau and others, making it impossible to perform in-house deliveries using these vehicles for five years.

• Additional vehicle suspensions: 188 (light vans)

  • Regarding the light freight motor vehicle transportation business, vehicle suspension orders totaling 13,910 vehicle-days (number of vehicles × number of days) were issued across 111 post offices nationwide.

Out of 3,188 post offices nationwide, the reality of an organized effort has been revealed, with 75% (2,391 offices) engaging in fraudulent roll calls(such as falsifying records when they were not actually conducted).

2. Punitive Bicycles (Power Harassment)

"Punitive bicycles" are a bizarre form of public shaming allegedly practiced at certain Japan Post offices.

• Content:

  • This involves forbidding postal workers who have caused delivery accidents or mistakes from driving motorbikes or light vehicles, and intentionallymaking them deliver mail on 'bicycles' loaded with heavy cargo, even in rain or wind. It is not merely safety training, but a practice that was continued until the individual felt humiliated, or was intended to encourage voluntary resignation.

  • The goal is 'humiliation' rather than rehabilitation: Originally, guidance after an accident should be for the purpose of preventing recurrence, but this is a form of 'making an example' to mentally corner someone, and is power harassment itself.

  • Lack of educational ability: Managers lack the ability to analyze and improve the root causes of accidents (such as overcrowded schedules or lack of skills), and relied on the pre-modern idea that 'if you cause pain, they will reflect on their actions.'

  • Lack of educational ability: Managers lack the ability to analyze and improve the root causes of accidents (such as overcrowded schedules or lack of skills), and relied on the pre-modern idea that 'if you cause pain, they will reflect on their actions.'

Thorough Analysis: Why was it such a failure?

The structural flaws of Japan Post common to these problems are as follows.

① 'Siloed quotas' that impose excessive burdens on the front lines

Since the Koizumi-Takenaka reforms, there has been a strong demand for cost reduction and profitability, but the postal business carries the public mission of maintaining 'universal service' (uniform service nationwide).

• Structural distortion: A vast amount of mail and parcels must be handled on a minute-by-minute schedule with limited personnel. This 'lack of margin' became the breeding ground for cutting corners on roll calls and emotional 'punishment' for mistakes.

② Closed and rigid 'Postmaster Culture'

In many post offices, 'special postmasters' with strong local ties reign supreme, often leading to a state of an 'independent kingdom' where control from the company headquarters is difficult to reach.

• Culture of concealment: The tendency to handle scandals within the 'family' and an environment where outside eyes are hard to enter resulted in the long-term neglect of drunk driving cover-ups and unique penalties (punishment bicycles).

③ Formalistic governance

Although the Japan Post Group has become a huge private enterprise, its internal mindset has combined the worst parts of the 'government-protected' era (avoidance of responsibility) with the worst parts of the private-sector style 'strict quotas.'

Conclusion: What is needed is the 'restoration of humanity'

These problems facing Japan Post are more of an 'organizational culture problem' than a 'system or legal problem.'

• Employees were treated as 'machine parts' or 'targets for punishment,' and their safety and dignity as human beings were neglected.

• Result: Trust has been lost, young employees are leaving, and the company has fallen into a negative spiral of further labor shortages and a chain of accidents.

The Koizumi administration's privatization pursued 'efficiency,' but the fact that it left behind 'human management'—how the front lines actually achieve that 'efficiency'—can be said to be the root of Japan Post's current predicament.

It is not just a violation of rules, but lies in an 'organizational culture where lying is rationalized.'

• The limits of 'documentationism': The head office was satisfied as long as the 'paper records' (falsified roll call records) from the front lines were in order, and did not try to look at the reality.

• The trend of viewing safety as a cost: Amidst the wave of 'efficiency' since the Koizumi reforms, an atmosphere prevailed on the front lines that viewed time spent on safety checks as a 'loss.'

• Hollowing out of governance: The fact that over 100,000 cases of falsification were overlooked proves that even if nominal compliance was introduced through privatization, the substance (the mindset of the staff) was completely lacking.

In this way, the price of drunk driving and fraudulent roll calls weighs heavily on the public and frontline staff in the form of a '6.5 billion yen loss' and the 'loss of trust as public infrastructure'.

I believe that there may be no choice but to re-nationalize the Japan Post Group. I strongly demand that some form of accountability be taken by the Liberal Democratic Party, former Prime Minister Junichiro Koizumi, and Mr. Heizo Takenaka, who led these efforts.

'Behind the pleasant-sounding slogan of "from public to private," what we lost were regional lifelines and the assets of the people. Now is the time to properly evaluate the cost of that frenzy.'

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