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Japan: Gov't Launches New Panel on Social Security, Tax Reforms |
| Source: |
japantoday.com |
| Source Date: |
Saturday, February 05, 2011 |
| Focus: |
ICT for MDGs
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| Country: |
Japan |
| Created: |
Feb 15, 2011 |
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The government launched a new panel of experts on Saturday to support Prime Minister Naoto Kan’s efforts to strengthen Japan’s social security system, an initiative that could be followed by a tax hike to cover its revenue shortfalls.
Kan, who chairs the new panel, has said he will seek comprehensive reforms as he tries to make the country’s welfare system more sustainable at a time when the population is aging and annual new debt issuance by the government is surpassing its tax revenues.
The panel, which involves ministers as well as representatives from businesses, labor unions and academia, will play a key role in Kan’s efforts to compile a reform plan by his self-imposed deadline of June.
It is widely believed that the panel, through hearings and debates, will aim to reach a public consensus on raising the consumption tax in several years’ time, although doing so could adversely impact the economy by slowing private consumption and weakening the corporate appetite for fresh capital spending.
Discussions will effectively revolve around Kaoru Yosano, economic and fiscal policy minister who strongly advocates increasing the sales tax rate from the current 5% to cover swelling social security costs, which amount to more than half of the government’s key policy spending.
Yosano, a defector from the once-dominant Liberal Democratic Party, joined the cabinet following a call by the prime minister, head of the Democratic Party of Japan, for nonpartisan talks. The opposition camp, however, has largely given a lukewarm reaction to Kan’s initiative, and has criticized Yosano’s entry into the government.
Other members of the panel include Hakuo Yanagisawa, president of Josai International University and a former LDP welfare minister. He has proposed that revenues from the consumption tax be used only for financing welfare services.
Another member, Yutaka Narita, top advisor to Japan’s largest advertising agency Dentsu Inc, used to chair a similar panel set up under a previous LDP-led government, while Taro Miyamoto, a law professor at the graduate school of Hokkaido University, is known for his study of social security systems in northern Europe.
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Japan: Gov't Launches New Panel on Social Security, Tax Reforms The government launched a new panel of experts on Saturday to support Prime Minister Naoto Kan’s efforts to strengthen Japan’s social security system an initiative that could be followed by a tax hike to cover its revenue shortfalls
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