Japan won’t raise taxes to fund childcare plan, PM Kishida says

JAPANESE Prime Minister Fumio Kishida on Monday (May 22) said he had no plan to resort to new tax measures to fund the government’s upcoming childcare package designed to reverse the country’s declining birthrate.

The government in March laid out a plan to boost childcare over the coming three years, but did not specify how the package would be funded.

“I’m not considering imposing new tax burdens, including sales tax hikes, to secure sources of funding childcare support,” Kishida told a government panel meeting including private-sector experts.

Kishida has pledged to double childcare spending to reverse Japan’s dwindling birthrate. The measures aim to make it easier for both parents to work and for household chores to be shared more fairly.

The government will unveil draft guidelines for implementing the childcare measures at the panel’s next meeting, Economy Minister Shigeyuki Goto told reporters, the date of which has yet to be set.

Earlier, some proponents for securing stable funding floated the idea of setting up a new special budget account, set aside from the state general account budget, to manage spending linked to childcare funding reforms, the Nikkei daily reported.

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The new account could be created through a partial merger of two existing accounts, for the welfare ministry and childcare agency, to be run by the latter with more flexibility in earmarking spending, the Nikkei said.

The new account would come on top of 13 special budgets Japan has already put in place.

However, the government is struggling to secure funding for the childcare package, which some lawmakers estimate will cost around 8 trillion yen (S$77.8 billion), in light of another programme to double the defence outlay over the next three years. REUTERS