The government and ruling parties decided late last month to "raise the consumption tax rate to 10 percent by the mid-2010s," as part of an unified tax and social security reform. The decision has left some leeway about the precise timing of introducing the tax raise and said the raise was subject to "the improvement of the economic situation." This was a strong reflection of the Democratic Party of Japan research committee's wishes.
It was quite evident that committee members were "eager" to postpone raising taxes as much as possible, but the debate about social security reform has hardly been sufficient.
No doubt the government will discuss how to set up frameworks for medical services, nursing care, pensions and child-care assistance. New councils will be created to hold debates among experts and stakeholders.
We hope the DPJ will set up subcommittees within the party to carry on the discussion. There will be no progress if the party continues to avoid debate over increased payments or benefit reductions.
Many difficult issues persist.
For example, under the introduction of fixed-sum payments at hospitals, patients will pay a small, fixed sum on top of their current payment of 10 percent to 30 percent of the medical fees. The idea is to pool the extra sum as a fund to alleviate the heavy burden of those with serious illnesses.
Of course, we would like to strengthen aid for those who suffer under the burden of heavy medical fees. However, why should that money be collected from patients? The Japan Medical Association is against the idea, arguing that the money should come from "public funds and insurance fees." How does the government plan to convince the doctors?
Moreover, when the government decided in 2002 to raise the salaried workers' medical payments from 20 percent to 30 percent, the legislation promised not to increase their burden. Does this not contradict the latest government decision?
The pension system also has many problems. The government proposes "strengthening the minimum support functions," which means increasing the pension payments for those with low incomes (including pensions). As a means of securing the necessary funds, the plan intends to reduce pension payments for those with high incomes.
However, how about asset holders with low incomes? Would the increase be a fixed sum, or a fixed percentage? Even the basic thinking behind the framework is unclear.
To begin with, the pension plan as a social security tool basically ought to match the burden with the payment. To reduce the pension payment for high-income people and allocate that to low-income people is breaking the promise, and may end up meaning that those who are honest draw the short straw.
They also need to consider how the plan correlates with the welfare system. Some experts think it might be less of a promise-breaker for high-income people not to cut pensions but raise taxes.
The DPJ's golden mantra is to assure the lowest-level pension payments using tax revenue, but even that has been put on the back burner. It is imperative that the DPJ consider this thoroughly as it prepares for a bipartisan discussion.
The DPJ research group is increasingly capable of approving the government plan in terms of taxes and social security. As the governing party, it has the responsibility to dive deeper into the debate.
--The Asahi Shimbun, July 10
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