Heavier burdens inevitable for sustainable social security
A newly launched expert council on the future of the nation's social security system will need to hold exhaustive discussions on ways to ensure people can live with peace of mind.
The national council for reform of the social security system has been inaugurated to deliberate the future shape of social security.
The head of the council, Keio University President Atsushi Seike, said at its first meeting Friday he hopes the council will develop "logical discussions as a group of experts."
It is crucial that the 15-member council, whose deadline for presenting its conclusions is set by law for August next year, hammer out measures for transforming the existing social security system--which has been fraying because of Japan's rapidly aging population coupled with a low birthrate--into a solid, sustainable framework.
While benefit payments have snowballed, premiums and tax revenues for funding these expenses have been floundering. The disruption in the balance between benefit payments and the burden on the public to finance the system is leading it to the precipice.
Government debts to make up for the revenue shortfall have ballooned.
Do away with inequities
The new council plans to ensure necessary social security services can be provided while "curbing the increasing financial burden on the people."
However, it would be all but impossible to maintain the system without asking the public to fairly shoulder a burden commensurate with their income level.
People aged 70 to 74 pay 10 percent of their medical fees from their own pocket, although the rate set by law is 20 percent. The medical bill burden for people in this age bracket is substantially lower than that of people younger or older than them. This has generated a sense of inequality. We think the supposedly provisional measure should be quickly removed so people aged 70 to 74 pay 20 percent of their medical bills.
Social security benefits will inevitably be curbed. In addition, pension benefits must be lowered in accordance with the falling wage levels of working generations currently paying pension premiums.
Steps to boost the low birthrate also are urgently needed.
As a percentage of gross domestic product, Japanese government spending on child care support is less than one-third that of the expenditures of nations such as France and Sweden, which have turned around their low birthrates. Effective social security measures, including expanding day care services for children, and ways to secure revenue, must be worked out.
The council will discuss four main issues: medical services, nursing care services, pensions and ways of reversing the low birthrate. Yet another issue--employment--must not be left unaddressed.
3-party cooperation vital
The council is expected to include in its agenda how to improve the working conditions of nonregular employees who are not covered by social security insurance plans despite earning low wages.
To translate the council's conclusions into concrete policies, cooperation between the Democratic party of Japan, the Liberal Democratic Party and New Komeito will be vital.
The DPJ has been arguing for the creation of a guaranteed minimum pension system and abolition of the special medical care service arrangements for people 75 or older. Both DPJ goals are unrealistic and opposed by the LDP and Komeito.
After the Dec. 16 House of Representatives election, the three parties, in parallel with discussions by the national council, must hold consultations and find solutions to these issues.
Nippon Ishin no Kai (Japan Restoration Party), for its part, wants to change the pay-as-you-go pension system, under which benefits for current pensioners are funded by premiums paid by workers, into a funded pension system under which premiums paid by workers fund the pension they receive after retirement.
Another new party, Nippon Mirai no To (Japan future party), has trumpeted the creation of a minimum pension guarantee system.
The feasibility of these arguments is questionable. Nevertheless, these arguments could affect deliberations by the council, depending on the results of the lower house election.
Every party must be well aware of the importance of stably maintaining the nation's social security system.
(From The Yomiuri Shimbun, Dec. 2, 2012)