Print

Mail

wiki links

State-run pension plan becomes an issue for Koizumi

"I paid what I should have paid."

Japanese Prime Minister Junichiro Koizumi

Japanese parliamentary debate over pension reform descended into chaos yesterday after the opposition demanded that Cabinet ministers reveal their payments -- or lack of them -- into the creaking state pension scheme.

Pension reform is one of the biggest headaches confronting Japan's rapidly ageing society and the main opposition Democratic Party hopes to make it a focus of Upper House elections in July.

Prime Minister Junichiro Koizumi's ruling coalition was aiming to push pension reform bills through a Lower House panel later yesterday to clear the way for enactment of the legislation, which would cut benefits while boosting payments.

The government, however, was embarrassed last week when three Cabinet ministers admitted failing to pay pension premiums, despite a public campaign to persuade ordinary citizens to do so.

"Do you think that mistrust in the pension system has been removed even a little bit?" Democratic lawmaker Motohisa Furukawa, 38, challenged Koizumi in a Lower House panel.

Furukawa -- waving what he said were documents on pension payments by members of the opposition's "Shadow Cabinet" -- challenged Koizumi to have his Cabinet members come clean.

Ruling and opposition parties had agreed to unveil the data by noon, media said, but Welfare Minister Chikara Sakaguchi told the panel the announcements would come after its work was over.

Debate then stalled amid shouting and desk-pounding until another Democrat demanded to know if Koizumi himself had paid up.

"I paid what I should have paid," Koizumi said.

A growing number of Japanese, especially young people, are refusing to pay premiums because they doubt the pension system will be able to provide benefits when they retire.

Koizumi's Liberal Democratic Party looked set for further embarrassment after media said Cabinet member Toshimitsu Motegi, 48, had also failed to pay premiums.

Democratic "Shadow Trade Minister" Shu Watanabe also confessed on his home page to having "missed" one month's worth of payments in 1990.

"It's classic Japanese reform -- many little steps in the right direction," said Jesper Koll, chief Japan analyst at Merrill Lynch in Tokyo.

Long life expectancy and falling birth rates mean Japan is expected to have roughly one person over 65 for every two of working age by 2025, a higher dependency ratio than any other industrialized nation.

The government legislation would raise contributions to a notional 18.35 percent of salary -- with employers and workers each paying half -- by 2017 from a current maximum 13.58 percent.

Benefits would be reduced to around 50 percent of salary by 2023 from about 60 percent, while the government's share of contributions to the basic pension scheme covering non-wage earners would rise to half from one-third by 2009.
This story has been viewed 2083 times.