The Cabinet on Friday approved a ¥2 trillion package to expand the scope of free education and child care services as part of Prime Minister Shinzo Abe’s push to address challenges to long-term growth posed by Japan’s declining birthrate and aging society.
The government hopes the policy package, consisting of ¥1.7 trillion from tax revenue and ¥300 billion sourced from corporate contributions, will help aging Japan maintain its global competitiveness.
But details, including how the total sum will be allocated for each policy measure, have yet to be hashed out, and restoring the country’s fiscal health, the worst among advanced countries, will become even more of a challenge.
The envisaged plan will in principle make nurseries and kindergartens free for all children between the ages of 3 and 5 regardless of household income.
For those up to the age of 2, free child care services will be provided if they come from low-income households that are exempt from residence taxes.
Expanded child care support is seen as critical in Japan, where female labor participation has been on the rise in recent years.
The administration has set a goal of eliminating waiting lists for child day care centers by building more facilities and boosting pay for nursery school teachers.
Abe has asked for financial contributions from the corporate sector, which will be spent on making day care facilities available for 320,000 children by the end of fiscal 2020. The monthly pay of nursery teachers will be raised by ¥3,000 from April 2019.
Most of the proposed programs will start in fiscal 2020 after the planned 2019 sales tax hike from 8 percent to 10 percent takes effect.
Higher education is another key pillar of the package, which was drawn up in consultation with the ruling Liberal Democratic Party-Komeito coalition.
The government will assist students with fees for higher education if they hail from low-earning households exempt from residential taxes.
Their entrance and tuition fees will be free at national universities, while financial support will be provided to those wishing to attend private universities, junior colleges, vocational schools or other institutions.
Taking heed of a request by Komeito, the government also aims to provide free education at private high schools for students from households with an annual income of less than ¥5.9 million.
In a bid to help Japan attain higher productivity and wage growth, the government will also reduce tax burdens on companies that bolster investment and raise pay.
The following is the gist of a policy package approved by the Cabinet on Friday to expand child care support and free education.
Under the package:
- Children between the ages of 3 and 5 can go to nurseries and kindergartens free of charge in principle regardless of household income.
- Day care services for children up to age 2 from low-income families will be provided for free.
- Monthly pay for nursery school teachers will be raised by ¥3,000.
- Students coming from low-income households will be exempted from entrance and tuition fees at national universities.
- The government will aim to provide free education at private high schools for students from low-income families.
- Tax burdens will be cut if companies proactively increase investment and raise pay.