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Deliberations on legislation related to the comprehensive reform of social security and taxation systems commenced in a plenary session of the House of Representatives on May 8, when the government explained the purposes of the reform. In addition, questions were asked regarding two pieces of legislation designed to strengthen the fiscal base and the minimum basic provision of the public pension system and unify employees’ pension systems (legislation 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 and legislation for the partial revision of the Employees’ Pension Insurance Act in order to seek to unify employees’ pension plans). From the DPJ, House of Representatives member Akira Nagatsuma, former Minister of Health, Labour and Welfare, posed questions to Prime Minister Yoshihiko Noda, Minister for Administrative Reform and Minister for Total Reform of Social Security and Tax Katsuya Okada and Minister of Health, Labour and Welfare Yoko Komiyama on such matters as the full picture of the future vision for social security, specific measures incorporated in the comprehensive reform of social security and taxation systems, and progress in administrative reform.
In explaining the purposes of the two bills, Komiyama pointed out that it was necessary to review the public pension system to make it a reliable and sustainable system in response to the changing social and economic conditions, such as the aging of the population and declining birthrate, changes in Japan’s industrial structure and an increase in irregular employment. To this end, she explained, the bills include measures to maintain and make permanent the funding of one half of the cost of basic pensions from national coffers, to set FY2014 as the fiscal year to secure stable fiscal resources for this, and to provide for matters concerning redemptions of government compensation bonds to be issued to cover the balance amount for FY2012. She also noted that the bills were designed to strengthen the minimum basic provision of the public pension system through such measures as: the shortening of premium payment periods to obtain pension eligibility, increased basic pension amounts for low-income earners, limitations on basic pension payments to high-income earners, the broadening of the application of employee pension plans to part-time workers, the exemption of workers on maternity leave from premium payments, and payments of survivor pensions to single-father families. Regarding the unification of employees’ pension plans, Komiyama explained that with a view to the unification of all public pension systems in the future, mutual pension systems for government employees and teachers and other staff of private schools would be integrated into the employee pension insurance system as the first step in order to ensure that there is fairness such that premium burdens and insurance benefits are set at the same level for private-sector workers and government employees if their salaries are at the same level. She also explained that the scheme for survivor pension transfer payments in mutual pension plans would be abolished, that the premium rates for the first and second tiers of mutual pension plans would be gradually raised to match the maximum 18.3% of employees’ pension plans, and that the third-tier portion (occupational portion) used for public pensions would be abolished and a separate law would be written to provide for new pensions after the abolition, with benefits relating to the pension period to be reduced by 27% from the standpoint of limiting the burden on the public.
Nagatsuma presented specific numbers such as population estimates and statistical figures and argued on the progress of the aging of the population and declining birthrate as well as the widening of income gaps, stating his vision that, “It is necessary for Japan, which is witnessing the aging of its population and decline in its birthrate at the fastest pace among developed countries, to establish a sustainable, new social system, or a Japan model that can serve as a paragon for the world. Under the new Japan model, networks which might be called “new chien (community-based connections)” should be formed largely on the basis of junior high school districts, with such key ideas implemented as ‘the doubling of mutual assistance’ in which local residents are allowed to choose options from administrative menus and participate in administration themselves, and the ‘doubling of business start-ups’ where all-out support is provided to venture firms, including social enterprises.” He also argued, “Social security was sometimes thought to be a ‘burden’ on economic growth in the past, but the establishment of appropriate social security should instead create the foundation for economic growth.” He asked for Noda’s comments.
In response, Noda expounded on his view about the direction for the establishment of a new social system in the era of the aging population and declining birthrate by commenting on the Japanese model in an aging society with fewer children: “The major pillars of the comprehensive reform of social security and taxation systems are responsiveness to all generations and the enhancement of medical services, nursing care and child-rearing in local communities. The government plans to establish a community-based comprehensive care system that can provide support for medical and nursing care as well as for livelihood and housing in an integrated manner on the basis of junior high school districts, allowing people to continue with their own ways of living in their familiar communities. As for social entrepreneurship, I expect such venture companies to make good use of their strength to address issues from the eye levels of citizens and play roles in a variety of areas, thereby creating new employment in communities.” He also agreed to the view of Nagatsuma about the relationship between social security and economic growth by saying that, “the integrated reform designed to enhance and stabilize social security and to ensure the peace of mind in the lives of the people in all generations can be expected to contribute to economic growth.”
In response to interpellations concerning the relationship between the DPJ’s pension reform plan envisioning the creation of a minimum guarantee pension of 70,000 yen a month, the unification of all public pension plans into an earnings-related pension system, and the necessity to establish a consultative panel on pension problems between the ruling and opposition parties in order to avoid a change in the pension system with each change of government, Noda replied, “Given that the establishment of a new system will require some time and pensions are to be paid out under the existing system for the time being, the government will first seek to improve the existing system. The government will do its utmost to secure the early enactment of the two bills and also deepen discussions with the ruling parties, with the aim of submitting legislation for a new pension system within FY2013. As pointed out by members of the House of Representatives, the pension system affects the lives of many Japanese people over a long period of time, and thus should not be altered with each change of government. It is essential to decide on a new system by obtaining national consensus, with a majority agreement among the ruling and opposition parties. I think the proposed consultative panel on pension problems may be one way of achieving this. I would like to take this opportunity to urge people in the opposition camp again to agree to hold consultations with the government and ruling parties on the comprehensive reform of social security and taxation systems for the sake of the Japanese public, including on the issue of how we should shape a forum for discussion among the ruling and opposition parties.”
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