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Yomiuri Shimbun file photo The Prime Minister’s Office in Tokyo
Jiji Press
17:05 JST, May 30, 2023
TOKYO (Jiji Press) — The Fiscal System Council on Monday adopted proposals urging the government to take measures to boost the net incomes of families with children, as part of its efforts to address the country’s low birthrate.
The council, which advises the finance minister, hopes the proposals will be reflected in the government’s key economic and fiscal policy guidelines to be adopted in June.
In the proposals, the council said that the outcome of measures to address the low birthrate will “greatly influence” the country’s economic growth as well as the sustainability of its fiscal and social security systems in the medium to long term.
Such measures will “determine the fate of the country” and need to be implemented in a “truly effective manner,” the council said.
The council mentioned both pros and cons of a plan being considered by the government to abolish the income cap on child benefits, with some of its members expressing doubts about providing the benefits to high-income families.
The council urged the government to secure stable financial sources for measures to tackle the low birthrate without relying on the issuance of government bonds, noting that the financial burden should not be passed on to future generations.
It called for creating a new framework under which costs for measures to address the low birthrate will be shared equally and broadly by all social and economic actors, including companies.
The council, however, had little to say about the use of taxpayers’ money. It only mentioned an opinion that the use of taxpayers’ money should not be ruled out.
The council also urged the government to press ahead with spending reforms in the social security area, calling for the “normalization” of special measures during the COVID-19 pandemic.
As for fiscal consolidation, the council warned that an increase in fiscal spending will not necessarily lead to sustainable economic growth, and stressed the need to create an environment for growth led by the private sector.
Regarding the Bank of Japan’s monetary easing policy, the council warned against assuming that low interest rates will continue indefinitely.
It noted that more attention should be paid to avoiding a loss of confidence in the public finance system that could lead to market turmoil.
