Prime Minister Shinzo Abe, who reshuffled his Cabinet on Wednesday, said he will boost efforts to reform the nation’s social security systems — a top domestic priority for him as he enters the last two years of his final three-year term as president of the ruling Liberal Democratic Party.
Discussions on the matter are, however, bound to be tough, as adjustments to the areas highlighted are likely to increase financial burdens on people, with a backlash expected from opposition parties.
“The biggest challenge is tackling the country’s aging population and low birthrate,” Abe said at a news conference after the launch of the reshuffled Cabinet. “I’ll push ahead with reforms to create a social security system reassuring to everyone,” he added.
Abe unveiled a plan to establish a new panel that would discuss sweeping reform measures, including support for parenting.
The push to reform welfare reflects Abe’s concern that the cost of medical care for elderly people is set to start surging in 2022, when Japanese baby boomers, born from 1947 to 1949, will be 75 or older.
During the news conference, Abe also said a key term for his social security reform initiative is “diversity,” saying he aims to change uniform welfare systems so that it will meet the various needs of individuals in different situations.
“We need to reform uniform systems that treat everyone in the same way,” he said.
The prime minister aims to have reform bills for pension and nursing care, and legislation to revamp medical care enacted during ordinary sessions of the Diet, in 2020 and 2021, respectively.
Under consideration are plans to raise elderly people’s out-of-pocket medical expenses to 20 percent from the current 10 percent under the health insurance system, and to increase co-payments by users of nursing care services.
Also being studied is the idea of expanding the scope of workers covered by the kōsei nenkin pension program for corporate workers. But that is expected to draw opposition from employers as the measure would increase their premiums.
Ruling bloc lawmakers may become increasingly cautious about social security reform measures toward the end of their terms in office, set for October 2021.
On Wednesday, Abe tapped Katsunobu Kato, one of Abe’s closest aides, as health and welfare minister. Kato told a news conference later that day that he will carry out social security reforms that will benefit all generations, including young people raising children.
The population of Japan is rapidly aging and about 27.7 percent of its 126.7 million are age 65 or older. The ratio is predicted to rise to 38.3 percent in 2065, and the population is projected to shrink to 88 million the same year.
Abe also aims to add some final touches to Abenomics, a policy of radical monetary easing, fiscal spending and vows of structural reforms he has been promoting since returning to power in late 2012. But escalating trade tensions between the United States and China threaten to overshadow any results from the economic policy.
The Bank of Japan has been promoting aggressive monetary easing in hopes of raising consumer inflation to 2 percent. But recent government data showed that the core consumer price index for July, excluding fresh food prices, had risen only 0.6 percent year on year.
Uncertainty about the Japanese economy is growing ahead of a planned consumption tax rate hike, from 8 percent to 10 percent, set for Oct. 1.
“We’ll take thorough measures in a timely manner if downward economic risks become evident” Abe said at the news conference. “We’ll work to make sure that Japan’s economy will not put a damper on the global economy.”