National Council on Social Security Starts

Prime Minister Sanae Takaichi held the first meeting of National Council on Social Security at the Prime Minister’s Official Residence on February 26th. Although Takaichi has been expecting widely multi-partisan discussion, only three parties participated in the meeting. Most opposition parties refrained from joining it or were excluded. It is doubtful that the council is worth called “national council.”

In her policy speech to the extraordinary session of the Diet last October, Takaichi proposed establishment of a national council for comprehensive reform of social security in the situation that her Liberal Democratic Party (LDP) did not have a majority in both chambers. When she decided a snap election in January, she added consideration of consumption tax cut, which would be related to social security reform, in her policies for the election.

 

After the Lower House election on February 8th, in which the LDP achieved a sweeping victory, Takaichi announced establishment of a multi-partisan council for reform of social security and consumption tax cut. Takaichi has super majority in the Lower House which enable any bill to pass the Diet. However, it is likely that she wanted to include other opposition parties in consumption tax cut to be responsible for her decision, because some former administrations faced public criticism of failure in dealing with the tax.

 

In forming the council, Takaichi offered a condition for opposition parties to participate in it. Participants would be limited to parties which would approve refundable tax credit in consumption tax system. Takaichi is planning to introduce the system, which would work for redistributing tax revenue to low-income families, several years later and demand elimination of consumption tax rate to zero for foods for two years.

 

Applied that condition, Japan Communist Party, Sanseito and Reiwa Shinsengumi were excluded from membership of the council. The Constitutional Democratic Party of Japan and Komeito, the parties in the Upper House which Lower House members formed Centrist Reform Alliance (CRA), were also not invited. The council consequently alienated 15 percent of lawmakers in the Diet from the national council.

 

Although Takaichi asked CRA and Democratic Party for the People (DPP) to join the council, both reserved their participation. The CRA has been upholding introduction of refundable tax credit before the LDP approved it. However, the party is skeptical about Takaichi’s intention of sharing responsibility with the oppositions. “We are going to examine whether the council is fabricating an alibi or not,” said CRA leader Jun-ya Ogawa, demanding open discussion in the Diet.

 

Advocating halving consumption tax rate, not a temporary elimination of the tax, the DPP also dismissed Takaichi’s invitation to the meeting. Although the DPP has been arguing that they would decide cooperation to Takaichi depending on its policies, it urged the LDP to make a proposal on the tax system as the major leading power in the Diet.

 

Consequently, the first meeting of national council was attended by the LDP, its coalition partner Japan Innovation Party and a small opposition party called Team Mirai. In the discussion, Team Mirai firmly opposed two-year moratorium for consumption tax on foods, requiring lightening payment for social insurances of young generation instead. While Takaichi hopes to have an interim report in June and to submit a bill to the fall session of the Diet, the schedule is yet foreseeable.

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