Japan’s government estimates it needs to raise about 3 trillion yen ($22.2 billion) in funds per year for a childcare policy Prime Minister Fumio Kishida has put forward to help reverse the declining birth rate, Jiji news agency reported on Thursday.
The government in March laid out a plan to boost child care over the coming three years, but the issue of financing the major spending package, such as tax hikes or debt issues, has been unresolved.
Under the planned financing scheme, Jiji reported, the government would expand the size of the funds gradually over the three years from fiscal 2024/25 and secure the necessary amount by the end of the policy period.
Kishida has said the government will identify the funds for the childcare policy by June and he was not planning to hike consumer sales taxes to that end.
Government officials could not be reached for comment outside of business hours. Jiji is one of the two major domestic news agencies in Japan with a track record of scoops.
Some ruling party lawmakers have floated the idea of issuing extra bonds, with the justification that education-purposed bonds should help future generations, while the government is struggling to come up with permanent sources of secure revenue.
Kishida has announced a plan to boost childcare support, following another big spending plan to double a national military outlay. These plans would strain Japan’s already dire public debt, which is over twice the size of annual economic output.
The government earmarked around 6.1 trillion yen for the last fiscal year ended in March to arrest the decline in the number of births.
Japan is among the world’s fastest ageing societies, with the annual number of newborns falling below 800,000 for the first time, having previously peaked at 2.09 million in 1973 during the second baby boom.
The declining birth trend has been blamed for a worsening labour shortage and reduced long-term economic growth potential.