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May 11 marked the third day of the deliberations on the comprehensive reform of social security and taxation systems. Minister of Finance Jun Azumi and Minister for Internal Affairs and Communications Tatsuo Kawabata explained two pieces of legislation relating to the comprehensive reform of social security and taxation systems (the “bill for the partial revision of the Consumption Tax Act for the fundamental reform of the taxation system” and “bill for the partial revision of the Consumption Tax Act for the fundamental reform of the taxation system and the local allocation tax bill”); and Tax System Research Committee Secretary General Shinichiro Furumoto posed questions on the explanations for the DPJ and the Club of Independents.
Furumoto pointed out the indispensable need to restrain national debt, stating, “We must stop the negative spiral in which national debt is used to compensate for there being insufficient funds for social security. The fact that half of the tax money received from the citizens is expended on the national debt is a wasteful usage of the national treasury.” Furumoto also advocated for the transformation of the existing social security system that relies on the working generation to provide benefits to seniors into a new system in which all generations would share costs and benefits.
Responding to opinions that it might be better to wait until the economy recovers before reforming the social security system, Furumoto argued that it would be necessary to implement fundamental reform in two years before the entire baby-boom generation started to receive pensions. In addition, he stressed that “The taxation system can change society,” referring to other tax reforms realized by DPJ administrations such as the change from a system mainly focusing on income deductions to one featuring a combination of tax deductions and direct benefits.
Prime Minister Yoshihiko Noda commented, “We should build a sustainable social security system in order to realize a society in which the children who shoulder the future and the working generation who live in the present are proud of having been born in Japan. Let us construct a warm society by enhancing support to the working generation, particularly those raising children, addressing their poverty.” Noda expressed his resolve for these issues, saying, “Both the ruling and opposition parties understand the necessity of a reform. We would like to find common ground through constructive and fruitful discussion among the ruling and opposition parties, working hard with the purpose of opening the way to a bright future for the citizens and Japan.”
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