Apply the welfare system to the birth of a newborn baby, and secure financial resources by utilizing the mechanism of issuing and redeeming government bonds.
Several issues in implementing this.
Advantages
- Strengthening social welfare without raising taxes.
– There is a possibility that financial resources can be secured by adjusting the issuance and redemption of new government bonds without relying on existing tax revenues.
- Expectations for an increase in the birth rate
– Providing a certain amount of financial support to newborn babies may reduce anxiety about raising children and lead to an increase in the birth rate.
- Long-term economic revitalization
– Support during childhood may lead to an increase in the future working population and promote economic growth.
Issues
- Financial risks from issuing government bonds
– Government bonds are basically “debt,” so future financial resources are required for redemption. If economic growth and increased tax revenues cannot be expected, it may ultimately lead to future tax increases.
- Inflation risks
– Issuing too many government bonds may increase the money supply and cause inflation. In Japan, where the population is aging, social security costs will also increase, placing a heavy financial burden on the government.
- Fairness and sustainability of newborn support
– Issues include the extent to which public assistance should be applied (such as whether to set income limits for parents) and the sustainability of support over the long term.
Adjustment proposals for realizing this goal
– Introduction of “growth-linked” government bonds
– Consider a system to issue government bonds for the purpose of newborn support and link redemption to the GDP growth rate. The redemption burden will be increased only when the economy grows, allowing for flexible response in times of recession.
– Utilization of public-private partnerships
– Allow companies to participate in birth support, and promote support for newborn families as part of employee benefits.
– Gradual application of support
– First introduce it to low-income earners, and expand the target after verifying the effectiveness.
Conclusion
This is a new form of means of securing social welfare funds. While fiscal risks and the sustainability of the system need to be taken into consideration, in order to achieve this while avoiding tax increases, it is theoretically possible to introduce a mechanism for balancing with economic growth and complementary support through public-private partnerships.
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