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Japan's free education plan moves closer to cabinet approval

[TOKYO] Japan's government will approve an economic package on Friday that will set aside around 2 trillion yen (S$24.04 billion) to subsidise education costs and improve elderly care, a draft document showed on Wednesday.

The government will earmark 800 billion yen for a new programme that will offer free day care for children three to five years old and free childcare for low-income households with children up to two years old from April 2019, the draft obtained by Reuters showed.

The government will spend another 800 billion yen to offer free university education and more grants to low-income households that will begin in fiscal 2020, the draft showed.

The package will also set aside around 100 billion yen to raise wages for workers at elderly homes and day care centres, the newspaper said. The package is expected to be formally approved on Dec 8.

To fund the spending, the government will use 1.7 trillion yen in revenue from an increase in the nationwide sales tax scheduled for October 2019, the draft showed.

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The government will also raise required employer contributions to generate an extra 300 billion yen in revenue.

The government will also expand subsidies for companies that invest in new technology and tax breaks to companies that raise wages or spend more on employee training, according to the draft.

The government will decide the amount of subsidies and tax breaks by year end. Prime Minister Shinzo Abe's government does have a target or raising productivity by 10 percent in fiscal 2020 compared to fiscal 2016.

Mr Abe has also made increased spending on education and assistance for low-income families a top priority after a big win in lower-house elections in October.


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