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Japan proposal bolsters child allowances to boost falling birthrate

But Tokyo unclear on any tax hikes to fund expanded payments

Children's Policies Minister Masanobu Ogura unveils a draft proposal aimed at reversing the nation's declining birthrate, including increased subsidies for child rearing. (Photo by Masaki Ishihara)

TOKYO (Kyodo) -- Japan's government pledged Friday, in a draft policy package to tackle the rapidly declining birthrate, to remove the income limit for parents to receive child allowances and increase the benefits for families with multiple children.

But the administration of Prime Minister Fumio Kishida has still shied away from clarifying to what extent it would hike taxes to fund the budget for such measures, which critics call "pork barrel" policies, in the run-up to a series of local elections in April.

Kishida, who took office in October 2021, has expressed eagerness to bolster spending to fight the declining birthrate, saying that carrying out child policies on an "unprecedented" scale is one of the most pressing agenda items.

The number of babies born in Japan in 2022 fell to a new record low for the seventh consecutive year, dropping below 800,000 for the first time since record-keeping began in 1899, official data showed in February.

In the latest draft policy, Kishida's government has also promised to raise child-care leave payments in an apparent attempt to enable more male workers to concentrate on parenting.

In Japan, 85.1% of eligible women took maternity leave in fiscal 2021 through March 2022, but only 13.97% of men did so. Many workers say they worry that taking time off may increase colleagues' workload.

Kishida has vowed to present a general framework aimed at "doubling" the children-related budget by June, as fears are mounting among voters that the government would conduct large-scale tax hikes to finance the costs.

Japan's public expenditures related to family support totaled around 10 trillion yen ($75.4 billion) in fiscal 2020, accounting for 2.01% of gross domestic product in the year and underscoring that the country has lagged behind developed European economies.

Sweden spent 3.46%, Britain 2.98% and France 2.81% of their GDP on child care, according to data released in fiscal 2018 by the National Institute of Population and Social Security Research in Tokyo.

The government will set up a new panel to be headed by Kishida to discuss issues on child policies, as he has committed to implementing necessary steps to allow 85% of male workers who have a child to take paternity leave by fiscal 2030.

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