The government is striving to downsize itself. With debts owed by the central and local governments amounting to 800 trillion yen, it stands to reason that, where possible, much of the work presently being carried out by government should be delegated to the private sector. But to uniformly pursue “small government” in every sphere of state activity would disrupt the basic fabric of society and leave the government unable to adequately fulfill its duties. A rigid approach under the name of structural reform and small government should be avoided, particularly when it comes to social security and welfare.
Government leaders need to carefully consider what the public wants concerning matters such as pensions, medical service and nursing care for the aged.
A Cabinet Office poll taken in October on “countermeasures to a graying society” offers valuable insights into people’s thinking on these matters. A total of 1,896 people across the country aged 20 years or older were polled. Fifty-three percent called for improvement of measures for the aged — more than double the 23 percent who said more attention should be given to younger people.
When asked to indicate the issues that most concern them, 59 percent of the pollees chose the “building of a social security system that sustains pension and medical services,” 48.2 percent would give “full play to elderly people’s talent and experience through employment,” 36.3 percent would maintain “health throughout one’s life and measures related to nursing care for the aged,” and 30.6 percent wanted to build a “safe society through steps such as antidisaster measures, traffic safety and crime prevention.”
Politicians and policy planners should find the following results revealing: 22 percent said the social security system should be improved even if that means increasing the financial burden on present and future working generations; and 44.4 percent said the present level of social security benefits must be maintained as much as possible even if that means a greater financial burden on present and future working generations.
By contrast, only 22.2 percent said they would accept a reduction in social security benefits if they were considered necessary to avoid increasing the financial burden on present and future working generations.
The polls shows that two-thirds of the pollees are ready to accept a higher financial burden if doing so maintains or increases the present level of benefits. It would not be far-fetched to conclude that a majority of the people want a high-burden, high-benefit approach — i.e., big government — when it comes to social security.
Japan is a small government/low-burden country in comparison to other developed nations. Social security expenditures by Japan’s central and local governments, and social security funds, account for 37 percent of gross domestic product. The figure is slightly higher than in the United States but considerably smaller than the euro-zone countries’ average of 49 percent.
The burden of tax, social-security premiums and government debts shouldered by the Japanese people amount to 45 percent of national income — lower than the 50- to 70-percent figures found in France, Germany and three Scandinavian countries.
The poll results should be taken as a call for changing the government’s plan for the pension system, which envisages gradually raising pension premiums while lowering benefits. The people are expressing their readiness to shoulder a higher financial burden in return for the government’s raising pension benefits and improving the quality of medical service and nursing care for the aged.
Prime Minister Junichiro Koizumi should use his strong power base within the ruling Liberal Democratic Party to help realize the people’s wishes. The government should avoid a rigid pursuit of financial discipline that compromises the people’s welfare.
Although the economy appears to be emerging from deflation, with enterprises realizing record profits and stock prices on an upward trend, the gap between rich and poor appears to be widening in Japanese society. Thus the government should not forget the important role it plays in redistributing income and ensuring social equity because the market mechanism alone is unable to do this.
At a ceremony to celebrate the LDP’s 50th anniversary, theatrical director Amon Miyamoto called on the party to “exercise imagination about people who cannot catch up with reform.” Government leaders should take his word as a serious warning.
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