Reforms
Another important step in the “trinity reform” package:
On 30 November, the LDP’s policy research committee approved a proposed agreement between the government and the ruling coalition on reform of the tax, financing, and administrative relationship between federal and regional governments (“trinity reform”). In order to decrease the amount Tokyo gives to regional governments in subsidies, the federal government lowered its contribution (in percentage terms) to allocations for children and expenditures on educators who work in public elementary and junior high schools.
The decrease comes to ¥654 billion. One way the agreement was finally reached was by saying goodbye (that’s the metaphor in Japanese, too–well, it’s more like “seeing off,” but the image is the same) to cuts in livelihood protection expenditures, which the regional governments had viciously opposed.
For those who don’t know, “livelihood protection” is basically the system that guarantees a minimum standard of living for citizens. Workers pay into it at the same time as they pay into the national pension system; the payouts they receive, by contrast, come from the pension system alone, unless they end up impoverished. Why would federal and regional governments get into a tussle over which kind of funding to cut? Take a look:
At the NHK Hall in Tokyo’s Shibuya on Monday [14 November], where a meeting to promote the decentralization of power was held, Tamotu Yamade, chairman of the Japan Association of City Mayors and mayor of Kanazawa, criticized the Ministry of Health, Labor and Welfare for agreeing to even part of the subsidy cut proposal.
“The problem of livelihood protection costs is merely a transfer of the burden” to local governments, he said.
“Reforms without ideology will leave the root of the evil behind. We must staunchly fight,” Yamade said, triggering thunderous applause from about 3,000 mayors and local assembly members attending the meeting.
At a news conference after the meeting, Aso said, “We would like the prime minister to take leadership this year to the last moment, unlike last year.”
Local governments are opposed to cuts in subsidies for livelihood protection, which [sic] the Finance Ministry is pushing for such cuts. The local governments are willing to accept cuts in subsidies for facilities at public schools, but the ministry is against that.
From the beginning, the Finance Ministry has been reluctant to subsidy [sic] reductions which do not lead to spending cuts, but is poised to oppose reductions in subsidies for school facilities, whose source is construction national bonds.
Over the last fifteen years, the number of people drawing on livelihood protection has risen, naturally, at the same time as the economy was frequently slumping. Spinning off repsonsibility for the program could easily stick regional and local governments with new collection and accounting headaches without increasing their discretion over where money and resources go. Note also that it’s about as easy to get the federal government to agree to issue fewer bonds as it is to get Courtney Love to take fewer drugs.
In separate but not unrelated news, the government plans to restructure out-of-pocket payments for patient care in the National Health system:
On, 30 November, the government and ruling coalition decided on the broad outlines of two-phase reform for the health care system that would raise the amount patients pay for medical care beginning next year. First, the percent paid by high-income patients 70 and over will increase to 30% from the current 20%; after 2008, the percent paid by middle- and low-income patients between 70 and 74 will as a rule increase to 20% from the current 10%. Conversely, the plan folds in an expansion–from younger than 3 to younger than 6–of the age at which payment for children is slightly decreased to 20%. The goal is to hold down increases in health care costs by keeping an eye on payments exacted from people during their child-rearing years while making those from the aged more appropriate.