Japan to boost child care spending to match Sweden

Photo: english.kyodonews.net
TOKYO. KAZINFORM - Japan said Thursday it will increase its spending on child care to a level on par with countries like Sweden, doubling it from the current size by the early 2030s as the rapidly aging nation aims to reverse the declining birthrate, Kyodo reports.

Under a draft plan to realize «unparalleled» child-rearing support, the government will boost annual spending by around 3.5 trillion yen over the next three years, though the debt-ridden nation is yet to decide how to fund it.

The doubling of spending will be measured by the budget allocated for a government agency in charge of children and family issues or by state support per child.

The government will discuss how to fund the program, which would expand the scope of child allowances toward year's end, in time for the compilation of a state budget for the next fiscal year from April.

The government plans to carry out spending reform and is considering raising social insurance premiums. A support fund scheme to which companies and other entities contribute will also be set up.

According to the plan, Japan will decide on a stable funding source by fiscal 2028, but Prime Minister Fumio Kishida has ruled out tax hikes.

Kishida instructed ministers to boost spending on child policy by around 3.5 trillion yen on Wednesday, up from roughly 3 trillion yen previously considered.

More funding should go to addressing child poverty and abuse and expanding support for children with disabilities or those in need of medical care, he said.

Sweden is among the nations that surpass Japan when it comes to providing state support for children.

According to the Organization for Economic Cooperation and Development, the ratio of public spending on family benefits to gross domestic product was around 3.4 percent for Sweden in 2019, while it stood at 1.7 percent for Japan. Sweden and other European nations, however, have higher tax rates and higher social security contributions.

Kishida has said now is the last opportunity to reverse a downward trend in births before 2030, underscoring the pressing demographic challenges that cast a shadow over the longer-term growth outlook for Japan's economy.

After the number of newborns in 2022 fell below 800,000, it is expected to decrease further to 500,000 in 2070, according to the National Institute of Population and Social Security Research.

The country's population of around 125 million is forecast to slip below 100 million in 2056.