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On March 30, two pieces of legislation relating to comprehensive reform of the tax system (a legislative proposal for partial revision of the consumption tax act in order to carry out comprehensive reform of the tax system to achieve a stable source of revenue for social security, and a legislative proposal for partial revision of the local tax act and the local allocation tax act in order to carry out comprehensive reform of the tax system to achieve a stable source of revenue for social security) and legislation to strengthen the function of the pension system that is related to the integrated reforms (a legislative proposal for partial revision of the national pension act in order to strengthen the fiscal base and the minimum basic provision of the public pension system) were approved by the Noda Cabinet. Three pieces of legislation relating to the new system for children and childcare (a legislative proposal for children and childcare support, a legislative proposal for integrated kindergarten and childcare facilities (so-called “kodomo-en”), and a legislative proposal relating to legislative revisions pertaining to the implementation of the aforesaid legislative proposals for children and childcare support and integrated facilities) were also approved. The legislative proposals were submitted to the Diet on the evening of that same day.
The two pieces of legislation relating to comprehensive tax reform had been debated for close on 50 hours in the related subcommittees of the DPJ Policy Research Committee, as well as in joint meetings of the party’s Integrated Social Security and Tax Reform Research Committee and Tax System Research Committee. The government’s draft proposal had then been revised based on the opinions voiced by many DPJ Diet members participating in these meetings, and formally approved by the party in the meeting between senior government and party officials held on March 28. The core of the legislation is proposed increases in consumption tax from the current rate of 5% to 8% in April 2014, and to 10% in October of 2015. “Measures pertaining to increases in the consumption tax” were included as supplementary provisions, these measures being ones relating to the implementation of comprehensive policies to bring economic growth as close to a desirable state as possible in the near future, and other necessary measures. Desirable economic growth was described as aiming on average for a nominal economic growth rate of around 3% and a real economic growth rate of 2% over the next ten years.
The legislative proposal to strengthen the function of the pension system is an essential piece of legislation in making the pension system into a sustainable and trustworthy one. It includes measures to make permanent the funding of one half of the cost of the basic pension from national coffers, to increase pension provisions for those on low incomes, and to expand the provisions of social insurance to part-time workers. The new system for children and childcare is a comprehensive reform of the system that aims to guarantee a high level of academic education as well as childcare for all children and to eliminate the waiting lists for childcare facilities, by for example integrating kindergartens and childcare facilities.
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