Discussions on How to Secure Stable Funding Resources Must Be Held

Measures must be taken immediately to overcome the low birth rate crisis. The government should swiftly secure stable funding resources and take effective measures.

The Health, Labor and Welfare Ministry has released vital statistics for 2022. The number of Japanese newborns was about 770,000, and the total fertility rate — the average number of children a woman is estimated to give birth to in her lifetime — was 1.26. Both figures marked record lows.

The number of newborns has declined by 20% over seven years, since 1 million births were logged in 2015. The population of young people is expected to continue to drop. If no measures are taken, the population decline will become more serious, and the nation’s vitality will wane. The nation as a whole must be involved in the implementation of effective measures.

The government has released a draft of its strategic policy for the future of children in which it specifies clear proposals for the “unprecedented” measures to tackle the low birth rate that have been trumpeted by Prime Minister Fumio Kishida. The strategy is characterized by a focus on economic support, as the government deems it necessary to boost the incomes of young people and those of the child-rearing generation in order to turn around the low birth rate.

The main pillar of the strategy is the expansion of child allowances. From fiscal 2024, the income cap will be scrapped and children through high school age will be eligible, compared to the current system, which offers support through junior high school age. The allowance amount is expected to be increased for the third and subsequent children of each household.

Households raising children face high costs for education and food, among other things. The expanded allowances are likely to help ease the financial burden on parents.

To extend the allowance eligibility through high school age, a proposal has also been floated in the government to scrap tax exemptions for dependents.

However, some people argue that this change would result in some households having to bear a greater burden than they currently do, thus diminishing the effect of the expanded child allowance system. The government must give the public a satisfactory explanation of the aim and significance of the measures in detail.

The government aims to secure an annual budget in the “mid ¥3 trillion range” to fund various child-related measures. For the time being, it intends to use government bonds as temporary funding, while also carrying out thorough spending cuts.

The government is considering generating funds from medical and other social insurance programs in the future, but the draft states that the measures will not put additional burdens on the public, such as an increase in social insurance premiums.

The draft also states that there will be no increase in taxes, including the consumption tax. The government might have been wary of a backlash against increased burdens.

Is it possible to raise more than ¥3 trillion without seeking increases in taxes and social insurance premiums? Social security benefits would have to be reduced in order to cut government spending. It must be said that the draft lacks persuasiveness.

Securing funding resources while ruling out a hike in consumption tax, which is shouldered broadly by the people, is an unreasonable idea to begin with. If the prime minister wants to reverse the low birth rate, he should not avoid discussions on increasing the burden.

(From The Yomiuri Shimbun, June 3, 2023)