Japan’s new social security panel eyes pension and medical care reforms

A newly established government panel for discussions on reforms to the social security system so that it benefits all generations held its first meeting on Friday.

“We’ll discuss sustainable reforms for pensions, medical care, elderly nursing and labor in light of the sluggish birthrate, the aging population and 100-year lifespan,” Prime Minister Shinzo Abe said at the meeting.

The panel is slated to draw up an interim report at the end of this year and a final report next summer.

The focal point will be to what extent the government will take major reform measures at a time when the country is about to see a surge in social security costs amid the rapid aging of society. Abe has refrained from mentioning the possibility of further raising the consumption tax rate to over 10 percent after the planned Oct. 1 hike.

The panel, chaired by the prime minister, also comprises related Cabinet ministers, including economic revitalization and social security reform minister Yasutoshi Nishimura, Health, Labor and Welfare Minister Katsunobu Kato, Finance Minister and Deputy Prime Minister Taro Aso and Chief Cabinet Secretary Yoshihide Suga.

Nine private-sector figures are members of the panel, including Hiroaki Nakanishi, chairman of the Japan Business Federation (Keidanren), the country’s largest business lobby, and former Internal Affairs and Communications Minister Hiroya Masuda, who is now visiting professor at the University of Tokyo’s Graduate School of Public Policy.

Toward the end of the year, the members will discuss boosting the number of people who pay into the social security system, focusing on the pension system and ways to promote the employment of elderly people.

Major items on the agenda on this topic will be expanding the scope of part-timers covered by the kosei nenkin pension program for corporate employees and creating a system to allow people to work until they reach the age of 70 if they wish.

The government is set to submit related legislation to next year’s ordinary session of the Diet.

Debates on a review of the country’s medical system are set to start next year, with medical costs expected to begin surging in fiscal 2022, when people in the country’s baby-boomer generation will be 75 or older.

“There is no magic wand,” Atsushi Seike, one of the private-sector members and former head of school operator Keio Gijuku, which runs Keio University and other institutions, said at the meeting.

The panel is likely to discuss measures including raising out-of-pocket medical expenses by people age 75 or over from the current 10 percent and promoting preventive medicine.

Meanwhile, the government and the ruling camp, led by the Liberal Democratic Party, are apparently reluctant to actively discuss steps that may spark public outcry at a time when political attention is being paid to whether Abe will dissolve the House of Representatives, the all-important lower chamber of the Diet, for a snap election during his final three-year term of office as LDP president through September 2021, analysts say.

“We won’t take draconian steps on social security only from a fiscal perspective,” Nishimura told a news conference after the day’s meeting.

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