Japan needs social security reform proposals

The government and the ruling coalition parties on Saturday launched a new panel of experts chaired by Prime Minister Naoto Kan to discuss social security reform.

We will wait and see how detailed a picture the panel can paint of the future of the nation’s social security system.

The de facto leader of the panel is the assistant to the chairman, Kaoru Yosano, state minister in charge of economic and fiscal policy. Members include University of Tokyo Prof. Hiroshi Yoshikawa, who headed the National Council on Social Security under former Prime Minister Yasuo Fukuda; and supreme adviser to Dentsu Inc. Yutaka Narita, who chaired a panel to discuss ways to realize a secure society under former Prime Minister Taro Aso.

Also participating are other experts who compiled policy proposals under the coalition government of the Liberal Democratic Party and New Komeito. Yosano is said to have selected the panel members personally.

Some members of the ruling Democratic Party of Japan have complained that the panel lineup does not reflect the change in government.

However, we think such critics are small-minded. Social security policy, like foreign and security policy, is an important matter related to the foundation of the country. It is not an issue to be disputed between ruling and opposition parties.

The public would feel insecure if policy that determines the course of the nation’s future is changed drastically with a change of government.

Therefore it is no wonder the new panel includes experts consulted by the LDP-New Komeito coalition.

Substantial reports were compiled by both the National Council on Social Security and the panel to discuss ways to realize a secure society.

The national council studied a comprehensive vision of possible measures to deal with issues related to public pensions, medical and nursing care, and the low birthrate. It proposed some options, along with the figures regarding the additional funds needed to realize them.

The council estimated that the additional funds that would be needed in fiscal 2015 would be equivalent to the revenues that could be earned from consumption tax rates ranging from 3 to 11 percent.

The panel to discuss ways to realize a secure society proposed spending consumption tax revenue only for social security purposes. It also said the money should be put into a newly created social security account and managed separately from other taxes, to spotlight a secure system that would return to the public benefits commensurate with the taxes they would pay.

It is significant that the former chairmen of the two government panels have joined the new one ― this means the new panel will carry over all the estimates and proposals made by its predecessors. The new panel should quickly draft a reform plan based on the discussions of the two earlier groups.

Based on that reform proposal, the prime minister has said he will present a basic policy on public pension and other social security issues by April and a comprehensive picture of integrated reforms of the social security and tax systems by June.

It is essential not only to clarify how much and when the consumption tax rate would be raised but also to reconsider the unrealistic proposal by the DPJ to integrate the public pension systems and the provision of child-rearing allowances.

There is deep-rooted antagonism in the DPJ toward Yosano, a defector from the minor opposition Sunrise Party of Japan. This aversion was heightened by Yosano’s appointment to the new panel of Hakuo Yanagisawa, who served as health, labor and welfare minister under former Prime Minister Shinzo Abe.

Given the seriousness of the government’s fiscal crisis, however, the social security system must be reviewed immediately, without delay. We cannot tolerate emotional confrontations that delay or distort discussions on the social security reform.

(The Yomiuri Shimbun, Feb. 6)