Sakaguchi focusing on pension reform

back

Sakaguchi focusing on pension reform

From The Yomiuri Shimbun

September 30, 2003

Prime Minister Junichiro Koizumi's new administration is up and running under the banner of "a Cabinet to promote reforms."

In the fourth of a series of interviews with senior Cabinet ministers with important and difficult responsibilities--such as curbing deflation, tackling pension reform and dealing with North Korea--Health, Labor and Welfare Minister Chikara Sakaguchi says an important task facing his ministry is to determine the steps to be taken in raising funds and implementing other measures needed to carry out a government plan to increase the ration of government contributions to the state-run basic pension plan from one-third to half.

The Yomiuri Shimbun: How will you reach a consensus about a pension reform plan with other government ministries and agencies as well as political parties that have stakes in the issue?

Sakaguchi: Since issuing a draft proposal, I've heard various opinions from ministries, agencies and political parties. I'll thoroughly consider the opinions and come up with a conclusion by the end of the year. Meanwhile, the general election will probably take up a lot of time, so time for the pension reform is limited.

What are your basic ideas on the reform?

The pension scheme is a system operated under the principle of mutual aid. However, a new system that will emerge from reform efforts should be designed to give its subscribers options.

We should study whether it's possible to implement an option under which pensioners are allowed to choose the age they start receiving the pension payment. Also, we should study other possible options. Meanwhile, we should deal with the declining birthrate and pension problems affecting women in situations that the current system does not account for. Another issue is whether the system should be changed entirely to an individual basis, and if so, how we should make that change.

What do you think of raising the portion funded by the government for payment of the basic pension?

We've already decided to raise the government contribution from the current one-third to 50 percent. The question now is how to do it. It would be the best to raise the ratio to 50 percent in April, but we must secure tax resources first. Whether we can do it next year will depend on the planned revision of the tax system this fiscal year. If the revision approves an increase in tax and we can secure resources for the reform, we'll be able to raise the rate next fiscal year.

If we can't do it in April, we should increase the government portion a step at a time over five years, for example. Making a clear plan will be the most important part of the reform.

How should the debate on the increase of the consumption tax be discussed?

From a social security point view, we should determine if the increase is for pension payment or for broader use. Some people say the entire basic pension should be covered by the tax, but then the consumption tax rate will be very high. Meanwhile, not only pension costs, but medical expenses are increasing. Besides, medical expenses are high in the first place. We also should take into account how to finance medical services.

How do you review investment of the pension reserve?

The health ministry doesn't necessarily have to manage the reserve. Maybe it's better to make it open to other institutions. It's people's money, and we should establish an incontestable way of management.

One idea is to distribute the reserve to a couple of institutions and let them compete in its management, like Canada does.

There will be a change this fiscal year in payment from the medical insurance system to medical institutions for services.

We'll watch medical fees for one or two more months and plan the revision of the medical service fees early next year.

The Central Social Insurance Medical Council is debating a reform of medical service fees, but it won't reach a conclusion before the end of the year. Its proposals will be reflected in the next review two years from now.

We should fully consider how to deal with the declining number of pediatricians and gynecologists.