Keidanren Proposes to Set Up IFI in Diet

(8th para should have read “… projections on households’ income, assets and composition types be shown …,” instead of as sent) Tokyo, April 13 (Jiji Press)–The Japan Business Federation, or Keidanren, offered Monday the idea of creating an independent fiscal institution, or IFI, to provide a basis for discussions on comprehensive tax, fiscal and social security reforms in the country. In its proposal concerning the reforms, Japan’s biggest business lobby underscored the importance of discussions in the Diet, the country’s parliament, based on objective, highly credible future projections. To establish formulas for such projections, setting up a permanent IFI in the Diet is one option, Keidanren said. Envisaged functions of the suprapartisan institution also include analyzing fiscal policy measures and their results and giving lawmakers advice, it said, adding that the body may be tasked to prepare data for setting out a social security outlook in the future. On fiscal consolidation, Keidanren advised that the government seek to achieve the primary budget balance in terms of a multiyear average, such as the average of three years, instead of the current single-year basis, with the fiscal balance checked annually. Prime Minister Sanae Takaichi’s policy of ending the initial budget compilation allowing for a supplementary budget each year and introducing a multiyear budget “makes sense,” it said. The group also urged the government to revise its “future perspective on social security,” released in May 2018, in light of the low birthrate and increasing elderly population in Japan, which is expected to be peaking in and after 2040. Furthermore, it suggested that projections on households’ income, assets and composition types be shown and that the data be used to consider relief measures for lower-income earners, child-rearing families and younger generations under heavy social security burdens. “A sense of crisis is heightening amid accelerating population aging,” Keidanren Vice Chair Hideki Kobori said. “We need a highly transparent system that enables us to see the big picture of taxation, government finance and social security and have our pinions reflected in government policies.” END [Copyright The Jiji Press, Ltd.]