Japan should spend 5 trln yen on new childcare plan -lawmaker

Japan should spend around 5 trillion yen on a new childcare plan to reverse the declining birth rate, ruling Liberal Democratic Party (LDP) heavyweight Hiroshige Seko told Reuters on Thursday, adding that extra debt issuance won't be ruled out to secure funding.

Japan should spend around 5 trillion yen on a new childcare plan to reverse the declining birth rate, ruling Liberal Democratic Party (LDP) heavyweight Hiroshige Seko told Reuters on Thursday, adding that extra debt issuance won't be ruled out to secure funding. The rare estimate of the size of the plan by Seko, secretary-general for the LDP in the House of Councillors, follows Prime Minster Fumio Kishida's pledge to double childcare spending.

However, the premier has steered clear of giving details, which he said will firm up in June when the government publishes a mid-year policy roadmap. "If that means investment for the future taxpayers, it could take the form of bond issuance," Seko told Reuters. "The starting point of the debate should be for us to share an idea of how much tax revenue would increase."

Childcare support is a top priority in Japan, with the country's childbirth seen falling below 800,000 last year for the first time, far less than about 2 million in the second baby-boomers era in 1973. Japan's government laid out its plan last month to boost childcare over the coming three years to reverse the country's declining birth rate.

Under the plan, the government will expand child allowances by scrapping means testing. It will also offer fully paid parental leave in workplaces. Japan's government earmarked around 6.1 trillion yen last fiscal year to address the declining number of children.

Japan is among the world's fastest ageing societies and its falling birth rate has been blamed for intensifying a labour crunch and pushing down Japan's long-term growth potential.

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