Kishida Says No New Taxes For Japan’s Birthrate Measures

The Yomiuri Shimbun

20:00 JST, May 23, 2023

Prime Minister Fumio Kishida said Monday that he is not considering asking for new tax burdens, including consumption tax, to secure financial resources for measures against the declining birthrate under any circumstances.

Kishida made the remarks at the fourth meeting of the Children’s Future Strategy Council. The council, chaired by Kishida, studies “measures of an unprecedented scale against the low birthrate.”

Meeting participants discussed measures to secure financial resources at the Prime Minister’s Office in Tokyo.

The government is working toward raising social insurance premiums as early as fiscal 2026.

At the end of March, the government unveiled a draft outlining measures to tackle the declining birthrate, including plans to scrap the income limit on the child allowance and extend eligibility for the allowance to families with children through high school. According to the draft, which also includes increasing allowances for households with multiple children, the government plans to set a three-year timeline to tackle the issue.

The plans are expected to require an additional budget of about ¥3 trillion a year.

At the Monday meeting, a basic policy plan for financial resources was presented. It includes a thorough review of expenditures to ensure public funds and curb the burden of insurance premiums to a maximum extent, and consideration of a new framework under which all participants in society and the economy, including businesses, can jointly support each other on an impartial basis.

Increases in medical insurance premiums are most likely to be proposed to ensure the increase of social insurance premiums. Since an increase in medical insurance premiums can be spread thinly over a wide range of age groups — from the young to the elderly — as well as companies, the existing premium collection system can be utilized.

In order to make the relationship between burdens and benefits easier to understand, it is also envisioned that relevant budgets that span multiple ministries and agencies will be centrally managed as a special account. The use of so-called bridge bonds, which are issued after the future financial resources to cover them are specified, will also be considered until medical insurance premiums are raised.

At previous meetings of the council, some participants said that taxes should be raised to secure financial resources for the measures to tackle the declining birthrate. However, the government decided only last year on a policy of tax increases aimed at enhancing defense budgets.

Kishida is believed to have made it clear that taxes will not be raised in light of wariness within the government and ruling parties that it would be difficult to gain public understanding of an additional tax hike.

Kishida indicated that he would present a draft of the strategic policy for children’s future, which will include a general framework for securing financial resources, at the next meeting of the council. “I will not miss the last chance for measures until 2030 against the declining birthrate,” he said.

The contents of the strategic policy are expected to be reflected in the “Basic Policy on Economic and Fiscal Management and Reform,” which is to be compiled in June.