Prime Minister Taro Aso has established a panel to discuss social security and state finance from a middle- and long-range viewpoint. The panel, described as a “conference to build a society in which people will have a sense of economic security,” has held its first meeting in which it confirmed that its final proposals will be produced in June so that they will be reflected in the government’s basic policy line in 2009.
Mr. Kaoru Yosano, finance and economic and fiscal policy minister, is in charge of the panel, consisting of 15 members chosen from among business and labor leaders, journalists, scholars and civic leaders.
Mr. Aso called on the members to depict a future vision of Japan by reviewing the roles of the private and government sectors, and setting policy goals in areas including medical and nursing care services, employment, pensions and population growth. The panel will focus on how to strengthen social security measures and how to raise funds to implement such measures.
Since the government will issue bonds worth more than ¥40 trillion for the fiscal 2009 main and supplementary budgets, it is unlikely to attain the goal of achieving a surplus in the primary balance in the budgets of the central and local governments by fiscal 2011. Mr. Aso might want the panel to pave the way for a future increase of the consumption tax.
Even though social security spending accounts for about half the general expenditure of the central government’s budget, people have little confidence in the system. The final report in November 2008 of the conference on social security, a different government panel established by the Fukuda administration, showed that a large amount of money will be needed to close holes in the nation’s social safety nets. It is hoped that the new panel will thoroughly discuss the matter from various viewpoints.
The ruling parties may incorporate the panel’s conclusion in their election platforms. As a Lower House election nears, the opposition parties also need to come up with proposals to boost social security benefits and measures to fund them.
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