The financial resources for “unprecedented measures to address the declining birthrate” developed under the full support of the Japanese government are becoming clear. The government has decided to expand the school grade span eligible for the child allowances by changing the highest school grade from the current “third grade of junior high school” to the “third grade of high school” from the end of the fiscal year 2024. Along with this change, the deductible amount of the exemption for dependents for income tax and resident tax will be uniformly lowered targeting households having high school students. Though this is explained as a countermeasure to the change of the maximum eligible school grade that causes too generous support for high school students compared to those for other age groups, I cannot help saying that the term, “unprecedented,” is completely losing the original meaning if such a carrot and stick approach is adopted for the measures to support the parenting generation.

Measures to address the declining birthrate will require an annual financial resource of more than 3 trillion yen, and adjustments within the determined budget or spending reforms will not be enough. This is why the government decided to introduce a “support fund system.” The government has positioned the three years from FY2024 as the implementation period of the childcare “acceleration plan,” and plans to apply approximately 500 yen per person to public medical insurance from FY2026 to FY2028 in response to this plan. This is also in line with the cause that “a whole society should be involved in medical insurance since companies also pay half of the cost.” However, although it is “insurance,” it is essentially a tax increase, and there are smoldering complaints from households without children.

The percentage of co-payments for latter-stage elderly people will also be raised. The burden on the working-age population will be curbed by allocating part of the self-pay amount by the latter-stage elderly to the funding of lump-sum allowances for childbirth. However, the original purpose of separating the medical care system for the latter-stage elderly from the health insurance system was to “reduce the medical care burden on the latter-stage elderly through financial support by the working-age people.” In other words, this measure is inconsistent with the original plan, and it highlights the government’s too optimistic prospects and the haphazard policy.

Meanwhile, there has been another last-minute action for childcare support. On December 5, a proposal to increase the amount of deductions for life insurance premiums for households with children was reported. “Favoring life insurance” in addition to measures such as advantageous mortgage rates and tax deductions for home renovation naturally provokes criticism for its “bias toward certain industries” and “difficulty in benefiting lower-income households.”

How will the government resolve conflicts among various generations, people having different lifestyles (such as having or not having children), and people with different income levels? Fundamental system building that goes beyond vertical approaches is essential. “Just trying to juggle different issues and developing individual stopgap measures may generate only half-backed results. As a result, everyone will lose their confidence in the future. If measures to address the falling birthrate are the highest priority, now is the time to be prepared to take “unprecedented” actions.

This Week’s Focus, December 8

Takashi Mizukoshi, the President