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Ruling, opposition party candidates divided on how to fund social security system

The Yomiuri Shimbun

By Tetsuya Ito and Tsuyoshi Oyabu / Yomiuri Shimbun Staff Writers Ruling and opposition party candidates are taking opposing stances on two main points of contention in the upcoming House of Councillors election — the economy and social security system — according to a recent Yomiuri Shimbun survey.

“Tax revenue for this fiscal year is at a record high. The fruits of this revenue are helping to improve the precious social security system,” said Prime Minister Shinzo Abe in a speech in Ise, Mie Prefecture, on Friday. Abe, who is also president of the ruling Liberal Democratic Party, argued that an increase in tax revenue due to his Abenomics economic policy package would lead to a stable social security system.

Abe’s views on the social security system are taking root in the party, according to the survey.

When asked which issue should be made a major point of contention in the election (with up to three answers allowed), 63 percent of LDP candidates chose measures on the economy and employment, making it the most-selected response in the party. When asked whether Abenomics has produced results, nearly every candidate in the LDP and its coalition partner Komeito answered yes.

On the other hand, opposition parties are insisting the public concern is rising over the pension system. Yukio Edano, leader of the Constitutional Democratic Party of Japan, has said in speeches around the country, “We must topple the Abe administration to ensure we’ll be safe in our old age and protect our lives.”

Opposition parties are working together to field joint candidates in constituencies with one seat up for grabs. They are making the social security system the largest issue in the election.

In the survey, candidates who said reform of the social security system including pensions and medical care was a major issue reached 70 percent for the CDPJ; 64 percent for the Democratic Party for the People; 84 percent for the Japanese Communist Party; and 67 percent for the Social Democratic Party. It was the most-selected response for the opposition parties.

The Financial System Council, an advisory panel to the prime minister, released a report in June before the start of official upper house campaigning that indicated an elderly couple would need ¥20 million in savings in addition to public pension benefits. Taro Aso, minister for financial services, was criticized for refusing to accept the report.

The CDPJ and other opposition parties are actively campaigning on the social security system, intensifying their criticism of the administration on an issue that is of high interest to the public.

Division on consumption tax

Meanwhile, many opposition party candidates opposed increasing the consumption tax rate to 10 percent in October — 95 percent for the CDPJ; 84 percent for the DPFP; 96 percent for Nippon Ishin no Kai; and 100 percent for the JCP and the SDP. Nearly all ruling party candidates responded that it should be implemented as planned.

However, even within the ruling parties some are opposed to further raising the consumption tax rate to secure financial resources for snowballing social security costs.

In the party leaders debate on July 3, Abe said, “There will be no need to raise the rate for the next 10 years or so [following the October hike].”

The survey also asked candidates to choose the best way to secure financial resources for social security costs. Sixty-eight percent of LDP candidates and 76 percent of Komeito candidates responded that tax revenue should be increased through economic growth. Only 15 percent of LDP candidates and 5 percent of Komeito candidates chose further increasing the consumption tax rate after the October hike.

Opposition parties oppose hiking the consumption tax rate. Fifty percent of CDPJ candidates chose covering the costs by increasing taxes other than the consumption tax, such as the income tax or the corporate tax.

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