The head of Keidanren has accepted Prime Minister Shinzo Abe's request for corporations to help the country expand child care services, to the tune of about ¥300 billion ($2.7 billion).
Sadayuki Sakakibara, chairman of the nation's biggest business lobby also known as the Japan Business Federation, said during a government advisory panel meeting that he would accept the request so more people can remain in the workforce while raising children. He said, however, that ¥300 billion should be "the upper limit."
"We heard from Mr. Sakakibara that up to ¥300 billion will be contributed in stages on the premise that the consumption tax will be raised to 10 percent," Abe told the meeting.
The ¥300 billion, expected to be paid in the form of employer contributions under the employee pension insurance system, will be part of a policy package worth ¥2 trillion that will be compiled this month to increase investment in human resource development.
The government plans to secure the remaining ¥1.7 trillion by using some of the revenue from the planned consumption tax hike in 2019, which will see the rate bumped from the current 8 percent to 10 percent.
In campaigning for the Lower House election in October, Abe said he was seeking voter approval for his plan to redirect tax revenue toward making both day care services and preschool free.
An advisory panel has been exploring ways to address challenges to long-term growth posed by Japan's declining birthrate and aging society.
Panel members attending Thursday's meeting also discussed the importance of continuous lifelong learning for workers and the reform of universities.