Secure revenues for recovery from quake
The most important task the government has now is to secure revenue sources to support efforts to recover from the catastrophic earthquake and tsunami that recently struck the Tohoku and Kanto regions.
The hugely expensive child-rearing allowance system initiated by the Democratic Party of Japan-led government must be abolished for now. In its place, a system based on the former system of dependent child allowances should be devised.
The current framework, under which 13,000 yen per child each month is distributed to households with children until they finish middle school, is to be extended for another six months under a bridge law passed by the Diet.
The government and the DPJ prioritized passing the bridge law and withdrew a bill that would have added 7,000 yen per month for children younger than 3 years old from the new fiscal year.
However, continuing the current system itself is a problem.
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No revenues for recovery
The system will gobble up 1.3 trillion yen for the six-month extension alone. If it is extended again for another six months, it will be almost impossible for the government to find revenue sources to fund programs related to recovery from the great earthquake.
If the child-rearing allowance system is revised before the extension period authorized under the bridge law expires, the considerable revenue that would have been devoted to it can be freed up for disaster recovery and relief budgets.
Based on this viewpoint, the government and the DPJ need to immediately begin to devise a new system. They should also consider shortening the extension period.
The Liberal Democratic Party has been demanding a return to the former dependent child allowance system.
Under the former system, 5,000 yen per month was given for first and second children aged 3 years or older and 10,000 yen per month for those younger than 3, as well as for third and subsequent children. There were income caps depending on family situations. The system was generous for families with many children and low-income families.
In contrast, under the current child-rearing allowance system, the same sum is given to rich and poor families alike. A quite high percentage of the allowances are believed to be stashed away as bank savings. If the old system is revived, nearly 2 trillion yen in extra funds will be available compared with the DPJ's initial plan.
However, the targets of the dependent child allowances are families with children up to primary school age. As the deduction from taxable income for families with children aged 15 years or younger has been already abolished, simply abolishing the current system to return to the old system would result in a de facto tax increase for families with middle school students.
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New Komeito's proposal
New Komeito took this point into consideration and came up with its own proposal for an allowance system that includes families with middle school students. Income caps are also part of its proposal. The amount to be provided will be 10,000 yen per child across the board.
The Komeito proposal is worth considering, but it would cost 1.9 trillion yen, according to the party. That means only 1 trillion yen could be used for recovery from the earthquake and tsunami disaster. We hope the party will hold further discussions on cutting the amount of benefits to be provided.
It is believed more than 10 trillion yen in government spending will be necessary for disaster recovery measures and relief efforts.
Eventually, additional issuance of deficit-covering government bonds and some sort of tax increase will be unavoidable. To do that, however, the government must abandon unnecessary and nonurgent dole-out policy measures such as the child-rearing allowance system and its plan to make public high school tuition free while subsidizing private high school tuition.
Without such spending cuts, it will be difficult for the government to win the understanding of the public.
Govt should welcome French nuclear help
Visiting French President Nicolas Sarkozy on Thursday discussed with Prime Minister Naoto Kan measures to deal with the crisis at the Fukushima No. 1 nuclear power plant, which was crippled by the March 11 Tohoku Pacific Offshore Earthquake. Sarkozy assured Kan the international community will unite to support Japan in its recovery from the extensive damage suffered in the disaster.
Kan and Sarkozy also agreed the nuclear accident will be on the agenda at the Group of Eight summit talks scheduled in late May.
Countries around the world are watching how Japan deals with the nuclear accident. Armed with the cooperation of France, which has many nuclear plants, the Japanese government should do its utmost to achieve the top priority--restoring the cooling functions of the nuclear reactors.
The French president visited Japan on his way home from an international seminar in China. As Sarkozy is also the chair of the G-8 and the Group of 20 leading industrialized and emerging economies, his visit also aimed at emphasizing that the international community as a whole should jointly work on measures to deal with disasters such as a massive earthquake and tsunami or a nuclear power plant crisis.
Sarkozy an N-power enthusiast
Frustration with Japan's inability so far to bring the nuclear situation completely under control might also have prompted the French president to visit Tokyo at a time when the Japanese government is clearly very busy dealing with the disaster.
France has the world's second-largest number of nuclear power plants in operation after the United States and depends on them for about 80 percent of its power generation. Sarkozy himself is eager to develop new markets for French nuclear power plants. He has tried to sell his country's nuclear reactors in India and the Middle East.
The French president emphasized at a press conference after the talks with Kan that development of nuclear power plants will never stop in spite of the problems in Fukushima Prefecture. Sarkozy also said he aimed to see new international safety standards on nuclear plants drafted by the end of this year through the G-8 summit talks and other international conferences.
He is apparently concerned that the current trouble might fuel movements against nuclear power generation around the world.
If the nuclear crisis worsens, it might have negative effects on France's nuclear-based energy policy.
Sarkozy also said France would like to offer Japan robots that can work in areas contaminated with radiation. Such robots could be used to carry out tasks that would otherwise involve exposing human workers to dangerous radiation levels.
An international effort
The chief of nuclear power company Areva SA and a team of experts in the disposal of radioactive water also came to Japan from France.
A joint liaison and coordination council has already been established between Japan and its ally the United States. Under the council, task forces including experts of the U.S. Nuclear Regulatory Commission have been working on measures to get the nuclear situation under control as soon as possible.
The government and Tokyo Electric Power Co., the operator of the Fukushima No. 1 nuclear power plant, should coordinate closely with each other to utilize assistance from abroad more efficiently.
"We are obliged to share this experience accurately with countries all over the world," said Kan. This is correct: The government must transmit information on the nuclear crisis accurately and speedily.
We hope that by bringing together the wisdom of the international community, a way can be found to overcome the crisis as soon as possible.
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