Face policy challenges from medium- and long-term view

The Yomiuri ShimbunHow will Japan face a serious decrease in population and maintain its national strength? And how should unstable East Asian issues be dealt with? Ruling and opposition parties must look straight at reality and get down to constructive policy discussions.

The campaign for the House of Councillors election will be officially announced today [Thursday].

Japan’s population is the fastest-aging in the world. The total population has been decreasing for eight consecutive years, while population outflow from provincial areas has been accelerating.

Politics in which the government modifies systems on an ad hoc basis cannot open a new vision for the future. It is vital to formulate measures from a long-term perspective and implement them.

Stimulate consumption

In a debate session of the leaders of seven political parties, which was organized by the Japan National Press Club, the focal points were economic policies and the social security system.

Prime Minister Shinzo Abe stressed the results of the Abenomics economic policy package by saying that “3.8 million jobs were created and the ratio of job openings to job seekers for regular employees exceeded 1.0.”

Corporate performance and employment continue to improve and the economy is recovering at a moderate pace, but it cannot be said that the economy has completely dragged itself out of the clutches of deflation. It is necessary to shore up policies in order to realize a virtuous economic cycle in which corporate profits lead to pay hikes, which stimulates consumption.

Party leaders should conduct in-depth discussions on growth strategy, covering such topics as increasing productivity by creating businesses via artificial intelligence and data, and increasing opportunities for women and elderly people to play active roles in society.

Yukio Edano, the leader of the Constitutional Democratic Party of Japan, said, “We’ll defend the lives of people who feel anxiety,” emphasizing his party’s policy to reduce the burdens on people in old age and promote support for child-rearing generations. Yuichiro Tamaki, the head of the Democratic Party for the People, said his party would reinforce the minimum pension guarantee.

The two opposition parties insist that the increase of the consumption tax rate to 10 percent should be frozen, even while they mention in their election pledges policies that would incur huge costs. Unless they present convincing financial resources, they cannot escape criticism that their policies are pork-barreling.

Taking up a report issued by the Financial Services Agency that an elderly couple would need ¥20 million in savings in addition to pension benefits to cover their living expenses after retirement, Edano criticized Taro Aso, state minister for financial services, for refusing to accept the report.

The prime minister explained, “Aso judged the report was inappropriate in terms of planning policies.” However, the prime minister should not give the impression that he is trying to put a lid on the issue.

The purpose of the report is to show that people should consider building up assets in their working-age years, bearing the extension of expected life spans in mind. It is hoped that party leaders will cool-headedly debate life planning after retirement.

Look ahead to 2040

Deepening discussions on comprehensive reform of the social security system will be vital. Dispelling people’s apprehension about the future is essential.

Gradually increasing the consumption tax rate was a pillar of the 2012 unified reforms of the social security and tax systems. These reforms were taken in preparation for 2025, when everyone in the nation’s baby-boomer generation will reach ages of 75 or older. As a next step, it will be important to consider crafting a new system based on a hard look at 2040, when Japan’s population of elderly people will peak.

The government plans to secure employment opportunities for elderly people eager to work, which will help ensure funding resources for pensions. It also aims to extend people’s healthy life span and curb medical expenses.

However, these efforts alone will not be sufficient to cover the nation’s snowballing social security expenses. The government should squarely face up to painful reforms, such as increasing the financial burden shouldered by the public and keeping benefits under control.

During the debate session with political party leaders, Abe said the nation will not need to hike the consumption tax rate to above 10 percent in the next decade. Even so, political leaders must not avoid discussions on issues that will shape the nation’s future.

It is crucial that every political party presents a big-picture view of the social security system, including medical and nursing care, rather than just focusing on pensions. They need to create an environment in which this issue can be earnestly discussed across party and faction lines, and not turned into a political football.

Be realistic on security

During the debate session, the leaders discussed U.S. President Donald Trump’s recent comments that expressed dissatisfaction with the Japan-U.S. Security Treaty, which he said placed an “unfair” burden on the United States.

Abe stated “reciprocity” in the treaty was being maintained, which he underlined by mentioning the U.S. obligation to come to Japan’s defense if it were attacked, and Japan’s provision of bases for U.S. forces. Abe emphasized the Japan-U.S. alliance’s deterrent effect had been bolstered through steps such as enabling the Self-Defense Forces to protect U.S. military ships based on security-related legislation.

Edano claimed the security-related legislation, which also allows the nation to exercise the right of collective self-defense in limited situations, violated the Constitution. Edano pledged to abolish the legislation.

Japan can use the right of collective self-defensive only under strict conditions. The legislation is consistent with previous government interpretations, so any suggestion that it violates the top law is wide of the mark.

The commissions on the Constitution in both houses of the Diet continue to barely function. The prime minister wants to frame the upcoming upper house election as a chance for voters to choose between political parties willing to discuss the Constitution and parties that reject such talks.

Opposition parties have argued that they called for deliberations on a bill to revise the National Referendum Law, which sets the procedures for amending the Constitution, but the ruling parties refused to accept their offer. This cannot be used as a reason for delaying discussions on the Constitution itself.

Political parties must take an approach in which they are willing to actively discuss how the nation’s top law should be and ensure that it fits changes in society and the economy.

(From The Yomiuri Shimbun, July 4, 2019)Speech


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