Photo/Illutration Prime Minister Fumio Kishida, second from right, speaks at a meeting of the Children’s Future Strategy Council at his office on April 7. (Koichi Ueda)

The Children’s Future Strategy Council, a government body headed by Prime Minister Fumio Kishida, got to work in early April as debate began picking up in the Diet on ways to finance policy measures to provide greater support to children and families with youngsters.

The challenge for policymakers and lawmakers is to come up with reasonable and convincing financing plans based on the notion that society has a duty to support children.

They need to weigh all realistic options and build broad consensus through careful and meticulous debate.

At the end of last month, the government unveiled a draft plan aimed at “strengthening policies for children and child-rearing.” Implementing all the proposals included in the blueprint would cost trillions of yen (tens of billions of dollars) in taxpayer money.

The big question is how to finance these measures. Some legislators in the ruling and opposition camps have proposed issuing government bonds to fund them. But Kishida demurred, calling for caution as the government needs to secure stable revenue sources to protect the credibility of fiscal policy.

We fully appreciate his position because the government faces the crucial task of securing long-term finance for such permanent policy measures.

As a guiding principle, the financing plan should be designed so that the financial burden will be shared widely among all generations and not be regressive. Making the system easy to understand will also be key to winning the support of a wide spectrum of people.

The strategy council has yet to propose specific ideas. Since Kishida has ruled out a consumption tax hike for this purpose, speculation has emerged that the leading candidates are increasing premiums for social security insurance programs, such as the public health care insurance program. But some lawmakers have already voiced opposition to the idea in the Diet, arguing that it would undermine the benefits of wage hikes.

Whatever plan is eventually adopted should not be hammered out through talks behind closed doors. The burden of social security insurance premiums tends to be borne mainly by the working population.

Experts point out that low- and middle-income earners generally feel a stronger financial impact from the payments of such premiums than well-to-do taxpayers. If social security premiums are targeted simply because a tax increase would be a hard sell to the public, the proposal will not win broad support.

Resorting to a tax for financing sources should not be rejected out of hand. Indeed, proposing a consumption tax increase is politically difficult now due to the current bout of inflation. But increasing taxation on income from assets and inheritance tax should be considered from the viewpoint of income redistribution.

Kishida has also asserted that spending reform is crucial for securing revenue sources. But the administration has also said savings from cuts in expenditures other than social security spending will be used to finance the proposed expansion of the defense budget.

The remaining possible measures are reducing health care and nursing care benefits and/or increasing payments into these programs. This approach, however, could threaten the long-term sustainability of these programs and place an excessive burden on the working population by forcing many workers to quit their jobs to take care of family members who need nursing care.

The government has made the mistake of deciding first on a defense spending increase of as much as 15 trillion yen ($112 billion) in five years before tackling the challenge of finding viable ways to finance measures to support children and families raising children. It should rethink and reassess its policy priorities.

The government needs to offer a big picture of the burdens and benefits to win broad public understanding and support. It should swiftly present realistic options about how much burden taxpayers need to bear for what kind of policy measures to support families raising children as a way to accelerate meaningful debate on the matter.

--The Asahi Shimbun, April 22

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