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News Navigator: Will companies have to pay to help eliminate day care waiting lists?

The Mainichi Shimbun answers some common questions readers may have about the government's plan to require companies to shoulder part of the costs of increasing the capacity of day care centers nationwide in an effort to eliminate long waiting lists to use such facilities.

    Question: Will companies be required to contribute some money to support efforts to eliminate day care waiting lists?

    Answer: That possibility is growing. Prime Minister Shinzo Abe pledged during the campaign for the Oct. 22 House of Representatives election to use a portion of the increase in revenue from a consumption tax hike scheduled for October 2019 to finance measures to make preschool education and day care free of charge and increase the capacity of day care centers, and led his Liberal Democratic Party (LDP) to a landslide victory.

    To live up to this pledge, the government is set to work out a policy package worth about 2 trillion yen by the end of the year. However, the government can secure only about 1.7 trillion yen of that amount using increased revenue from the consumption tax hike, and is asking the business community to shoulder the remainder, as much as roughly 300 billion yen.

    Q: Why will companies be required to pay that expense?

    A: This policy is based on the idea that apart from the government, society as a whole, including companies, should join hands in implementing measures to support childrearing. If the development of day care centers progresses, it will help employees bring up their children while working, which will eventually benefit businesses.

    Q: How will corporations foot the costs?

    A: The government is considering raising the amount of contributions that companies are required to extend to a fund to support childrearing simultaneously when they pay premiums for their employees' pension program. Premiums for the employees' pension program and the nursing care insurance program are footed evenly by employees and their employers, but companies must pay the total amount to the childrearing support fund. The fund was initially set up to cover the costs of the child allowance system that was introduced in 1972. The fund was expanded in fiscal 2015 to cover the costs of operating facilities for after-school activities for children and other measures to support childrearing.

    Q: How much will the contributions that firms are making to the fund be increased?

    A: The amount of contributions is currently equal to 0.23 percent of the standard monthly remunerations for employees at each company, totaling approximately 400 billion yen across the country. A plan to raise this rate on a step-by-step basis to 0.45 percent, thereby increasing total revenue by roughly 300 billion yen, is under consideration. Sadayuki Sakakibara, chairman of the Japan Business Federation (Keidanren) that represents major companies, is in favor of the plan.

    However, Akio Mimura, chairman of the Japan Chamber of Commerce and Industry, many of whose members are smaller businesses, has expressed displeasure at the move saying that discussions on the issue are based on the premise that businesses will be required to shoulder heavier financial burdens. The government intends to submit a bill to revise the system to next year's regular Diet session at the earliest. However, there may be several twists and turns over the matter before reforming the system. (Answers by Akihisa Kudo, Economic News Department)

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