Financial resources for measures to address the declining birthrate are discussed at the Fiscal System Council

In preparation for the "Basic Policy" to be compiled by the government in June this year, the Council on Fiscal Systems, an advisory body to the Minister of Finance, has begun discussions.

As government spending increases due to measures against the novel coronavirus, views were exchanged on the path toward fiscal consolidation and measures to address the declining birthrate, which is a focal point.

Every year, the Council on Fiscal Systems publishes its recommendations before the government compiles the Basic Policy on Economic and Fiscal Management.

Discussions began on the 14th to compile the recommendations, and opinions were exchanged on how to proceed with fiscal consolidation amid the expansion of government spending due to measures against the novel coronavirus.

Members pointed
out that, as the infection situation stabilized, expenditures that had ballooned exceptionally should be returned to normal conditions without delay, and
that it was necessary to abolish those that were less effective by examining the contents of the novel coronavirus countermeasures.

In addition, the government plans to present a general framework for doubling the future budget for children and child-rearing by this year's "Basic Policy."

For this reason, at the meeting on the 14th, it was pointed out that the declining birthrate in Japan is a critical situation, and while it is necessary to promote highly effective measures, it is essential to secure stable financial resources.

The Council on Fiscal System will meet again next month to discuss measures to address the declining birthrate, including financial resources.

The government's measures to address the declining birthrate "Require financial resources on the scale of several trillion yen"

There is a view that financial resources on the scale of several trillion yen will be required to realize the measures to address the declining birthrate that the government is aiming for, and studies are underway on how to secure them.

Some business circles and experts have pointed out the need to raise taxes, arguing that the burden should be broadly borne by society as a whole.

However, there are many negative opinions within the government, saying that it is difficult to ask the public to bear an additional tax burden, partly because it has indicated a policy of raising taxes in order to strengthen defense capabilities.

In addition, both the ruling and opposition parties have called for the issuance of government bonds, but the government is taking a cautious stance on the fiscal situation and postponing the burden on children's generations.

Within the government and ruling parties, proposals to utilize social insurance such as medical care and nursing care have been floated, and it is expected that financial resources will be raised by raising insurance premiums and curbing benefits, including for the elderly who have the ability to bear the burden.

One government official said, "If the birthrate continues to decline, it will become difficult to maintain the social insurance system and corporate activities, so I think we will gain understanding."

However, it has been pointed out that even if insurance premiums are raised by several hundred yen per month in the case of a split between labor and management, only about 1 trillion yen can be raised, which is still insufficient, and some in the business and labor circles have objected that it would dampen the momentum for wage increases.

The government plans to clarify the outline for doubling the child-rearing budget in the future by the time it formulates its "Basic Policy" in June, and the focus is on how much concrete financial resources can be presented.

Chairman Tokura: "We should discuss so that a wide range of people bear the burden."

At the Council on Fiscal System on the 14th, Keidanren Chairman Tokura was newly appointed as the chairman of the council.

At the press conference after the meeting, Chairman Tokura stated that the strengthening of measures to address the declining birthrate, which has become a focal point, "is a discussion related to the issue of 'social security oriented to all generations' and 'work style reform,' and we should definitely have a robust discussion, set priorities, and proceed with a balanced manner."

Regarding financial resources for measures to address the declining birthrate, the government and ruling parties have proposed securing them through the use of social insurance.

Regarding this, Chairman Tokura stated, "It is fundamental to collect money widely and thinly throughout society, rather than placing a burden on people of a specific generation or in a specific field. He suggested that discussions should be held so that a wide range of people bear the burden without limiting financial resources.

Utilization of social insurance: Objections from the business community

While discussions are underway to double the budget for children and child-rearing, there are objections from the business community to the idea of using social insurance as a source of revenue within the government and ruling parties.

Mr. Sakurada, Representative Director of Keizai Doyukai, said at a press conference on March 4, "I believe that the burden on workers' household budgets, including medical care, pensions, and nursing care, is approaching its limit by relying on insurance premiums for financial resources."

He then stated, "To be honest, I personally doubt why the consumption tax has not been introduced, and although people may think that the consumption tax is a demon gate, at least it does not mean that the people as a whole are wrong with using the consumption tax as a source of social security revenue," and expressed the idea that consumption tax should be considered as a source of revenue.

Representative Izumi Rikmin "Budget allocation for measures to address the declining birthrate is weak compared to others"

At a press conference, Izumi, a representative of the Constitutional Democratic Party of Japan, indicated that Japan should consider strengthening the financial income tax in order to secure financial resources for measures to address the declining birthrate.

Regarding the budget for measures to address the declining birthrate for this fiscal year, Izumi stated, "As the birthrate is declining, the way in which the budget is allocated is weaker than others, and I have to say that this is the Kishida administration's disregard for measures to address the declining birthrate and support for child-rearing."

Regarding financial resources to strengthen measures to address the declining birthrate, he pointed out that "the government's platform does not indicate whether it is a tax or social insurance premiums, and since we can raise 5 trillion yen in defense spending over five years, we should be able to allocate more to the child-rearing budget."

He also stated, "There are cases where large profits are made from financial income, and it may be necessary to have a means to increase tax revenues from such areas," and suggested that consideration should be given to strengthening the taxation of financial income.

Komei, Secretary-General Ishii "The use of social insurance is one of the financial resources for measures to address the declining birthrate"

Regarding financial resources to strengthen measures to address the declining birthrate, Komeito Secretary-General Ishii expressed his recognition at a press conference that contributions from social insurance are one of the measures to secure the birthrate.

Komeito Secretary-General Ishii said, "I believe that the use of social insurance is one of the financial resources for measures to address the declining birthrate.

In addition, regarding the opposition parties' criticism that "the burden on the working generation will increase," he pointed out, "I would like them to show what they think about alternative sources of revenue and have a thorough discussion.