An important policy challenge facing Japan is how to reform its social security system to cope with a rapidly ageing society due to a low birth rate, to ensure equitable burden sharing.
The daunting task requires extensive public debate, and the onus is on the governing camp to provide viable policy options ahead of this summer’s upper house elections so voters can articulate their choices.
We urge the government to demonstrate its strong commitment to reshaping an already burdensome social safety net to ensure it can meet the increasingly complex and demanding needs of a country whose elderly population will peak in the 2040s.
An expert panel advising the government to achieve its policy goal of creating a “social protection system for all generations” recently released an interim report on key issues that need to be addressed.
The issues discussed by the panel set up by Prime Minister Fumio Kishida’s government will be included in the annual “Basic Policy for Economic and Fiscal Management and Reform”, the “honebuto no hoshin” (big bone policy) to be announced in June as there is no Debate of any limitations.
Supporting families with children and young people was listed as the most pressing policy issue by the panel of experts. It called for “additional policy responses” to ease the financial burden on this generation and make it easier for informal workers to take parental leave.
The panel also presented a comprehensive debate on expanding the social insurance system to cover freelancers and part-time workers. It highlights the need to consider institutional responses to meet the challenges posed by the COVID-19 pandemic. In this regard, it calls on family physicians to play a more effective role in the national healthcare system, providing housing for those in need and the elderly.
All of these are undoubtedly crucial policy challenges. But the panel’s report on key issues provided no clues about the cost of implementing the proposed policy measures, which are critical for evaluating options and making decisions.
It would be a shame for the panel to avoid providing cost estimates, given the government and the ruling coalition’s reluctance to address questions about “burdens and benefits” ahead of the House of Lords polls.
When it began “comprehensive social security and tax reform” in the 2010s, the government provided estimates of how the benefits and burdens would change over time under various scenarios, with or without reform.
To ensure a meaningful public debate on Social Security reform, it is critical to provide cost estimates, possible financing plans, and other information to weigh the pros and cons of various options.
The envisaged social security reform will also test the government’s ability to overcome political obstacles. For years, the Labor Department’s study groups and advisory committees have been discussing proposals to expand the Social Security program to cover freelancers and other informal workers. But no significant progress has been made.
Any major reform of the health care system aimed at strengthening the role of family physicians is likely to face strong opposition from the Japan Medical Association and other lobbying groups.
It should also be noted that some important social security issues were not addressed in the Panel’s report. One issue of high public concern is the decline in the level of basic pension benefits. This question is raised every time a program is reviewed.
The downward trend in birth rates in recent years could further jeopardize the financial future of public pension schemes. The government must respond to these concerns.
Social security reform needs to address a wide range of issues. The government should divide them into short-term challenges and medium- and long-term challenges. Otherwise, its policy response will not be able to keep up with the harsh realities of national social security systems. Postponing work further is clearly not an option.
– The Asahi Shimbun, May 21