The government said Friday that revenue from the proposed hike in the consumption tax from the current 5% to 10% will be used only for social security expenditures.
Deputy Prime Minister Katsuya Okada made the comments after a meeting with four other cabinet ministers, NHK reported. The ministers said that 2.7 trillion yen (1%) should be used to bolster the social welfare system, such as lowering insurance contributions for low-income earners and increasing the number of day-care centers.
They said that 10.8 trillion yen (4%) would be used to stabilize the current social security system, keeping government contributions to pensions at the current 50% and to care for the elderly.
Prime Minister Yoshihiko Noda says Japan urgently needs to reduce its debt burden as the nation ages and its labor force shrinks, putting a greater burden on the social security and tax systems.© Japan Today