Statement Calling for Re-examination of the “Social Security Reform Categories” in the Basic Policy on Economic and Fiscal Management and Reform 2015
The government decided on its “Basic Policy on Economic and Fiscal Management and Reform 2015” (the “Basic Policy 2015”) at a cabinet meeting on June 24, 2015.
While the Basic Policy 2015 explicitly expresses the viewpoint of achieving fiscal management which contributes to economic growth, specifically referring to the “industrialization of public-related services,” including social security services such as medical care, nursing care and child-rearing, it also contains a statement that “[c]urbing increases in the costs to be borne by the public in turn contributes to economic growth… …”
With reference to social security, the Basic Policy 2015 states the following fundamental principles: (i) “a sustainable universal healthcare system that is a combination of self-help, mutual aid, and public assistance”; and (ii) “a social security system consistent with economic growth.” Through the implementation of these principles, social security expenses of between 300 billion and 500 billion yen per year are expected to be reduced from the national budget in the future.
However, as Articles 13 and 25 of the Japanese Constitution guarantee the right to maintain minimum standards of wholesome and cultured living, it is incumbent upon the government to fulfill its responsibility to improve and promote such standards. Since protecting the right to reasonable living standards should be prioritized as a national objective, the government should not be permitted to limit required social security payments merely due to a lack of financial resources. The Basic Policy 2015 places greater priority on economic growth than on the life and dignity of the Japanese people; however, the order of priority should be reversed. In order to achieve both social stability and economic development, it is essential to enhance the rights of the Japanese public to maintain certain standards of wholesome and cultured living. In this regard it should be noted that OECD surveys have clearly shown the link between a widening income gap and decreased economic growth.
Further, placing excessive emphasis on the concept of “self-help” in the social security system would reduce the government’s responsibilities as well as lead to promoting “industrialization” and “privatization” in public-related services, and this also goes against Article 25 of the Japanese Constitution.
Moreover, currently, the relative rate of poverty has deteriorated to a record high level (as per the “Summary Report of Comprehensive Survey of Living Conditions 2013” published by the Ministry of Health, Labor and Welfare). The reduction of social security expenses as set forth in the Basic Policy 2015 would further aggravate the widening poverty and disparity problems.
The Basic Policy 2015 states that the main revenue sources needed to maintain the social security system will come from the implementation of a hike in the consumption tax rate. However, this is particularly problematic when taking into account the issues of: (i) the redistribution of income, which is naturally assumed in the Constitution; and (ii) the ability-to-pay principle, i.e. the idea of placing a heavier tax burden on those with higher levels of income, as requested in Articles 13, 14 and 25 of the Japanese Constitution.
What is actually most needed at this moment is the establishment of a society in which everyone can lead a full and meaningful life by way of: (i) ensuring the raising of necessary tax revenues by effectuating a thorough implementation of the ability-to-pay principle and utilizing the equal and fair tax system; and also by (ii) enhancing the social security system and strengthening the income redistribution function which helps to correct the expansion of poverty and wealth disparity.
As stated above, the JFBA strongly requests the government to re-examine its plans for further reductions in the provision of social security that have been described in the Basic Policy 2015.
August 28, 2015
Japan Federation of Bar Associations