New phase in Abe's policies

New phase in Abe's policies
Japanese Prime Minister Shinzo Abe.
PHOTO: Reuters

Prime Minister Shinzo Abe plans to tackle a diverse array of policy challenges - including social security, economic and fiscal problems, diplomacy, preparations for the Olympics, and more - with a new lineup following the reshuffling of his Cabinet on Wednesday. However, all of these issues are fraught with difficult challenges, and they will be in no way easy. Here is an overview of the direction these policies are taking. The first instalment of this series focuses on social security.

All policy measures will be employed for economic growth. This is how the prime minister positioned the aims of the second stage of his Abenomics economic policy package at a press conference after being reelected as president of the Liberal Democratic Party on Sept. 24. Abe emphasised the "firing of new three arrows" as the centerpiece of his policy.

The first arrow: Realizing the "largest economy since the end of World War II" with the aim of a gross domestic product of ¥600 trillion (S$6.959 trillion) around 2020.

The second arrow: Raising the average number of children a woman has from its current rate of about 1.4 to about 1.8 to curb the decline in the Japanese population.

The third arrow: Establishing a social security system that can lead to public peace of mind, such as by eliminating the necessity for people to leave their jobs to provide nursing care for their parents by the early 2020s.

With the enactment of the security legislation, Abe has repeatedly expressed his view that he would return to giving top priority to the economy. Abenomics - which began with the second Abe Cabinet formed in December 2012 - has delivered a favourable cycle of high stock prices and correction of the overvalued yen through bold monetary easing, transforming an economy that had sunk under the weight of long-term deflation. It was a "quick fix" policy, so to speak.

However, a fundamental reform of Japanese society is considered essential to deliver growth over the long term. Abe has mentioned elderly people who can still work and the large number of women who still leave work to marry and for other reasons because he aims to reduce "negative factors for economic growth," even if just slightly.

The reason Abe's focus has settled on the nursing care problem is that the economic impact caused by the decline of the workforce can no longer be ignored - the number of people forced to leave their jobs annually to provide nursing care has exceeded 100,000.

In 2020, about 8 million baby boomers, born between 1947 and 1949, will be over 70 years old, making the nursing care problem all the more severe. If the "junior baby boomers" born between 1971 and 1974, who are in their 40s and the primes of their careers, were to leave their jobs in quick succession to provide nursing care, "the economy and society would fall apart," the prime minister has said.

Ministries at odds

Prior to the prime minister's press conference, the Prime Minister's Office and the Finance Ministry drafted a memo titled "a concrete policy of making the number of people who leave their jobs to provide nursing care zero." The Health, Labor and Welfare Ministry - responsible for nursing care - was left out.

The parties concerned deemed "the Health, Labor and Welfare Ministry to be a force of resistance" in hammering out a bold nursing care policy from an economic standpoint, according to government sources.

Many leave work to provide nursing care because there is a chronic shortage of nursing care facilities, such as special nursing homes for the elderly (see below) operated by social welfare corporations and local governments, which forces family members to provide care at home.

There are an estimated 150,000 people currently waiting for openings at these facilities. This number is expected to exceed 200,000 in 2025.

The memo emphasised "accelerating" the construction of special nursing homes and similar facilities beginning this fiscal year.

When the Health, Labor and Welfare Ministry learned of the memo, it raised objections with the Finance Ministry. "When the number of such nursing care facilities increases, the number of people wanting to enter the facilities will also increase," a senior health ministry official said.

If the number of the facilities is increased, there is a risk that residents in private fee-based nursing homes, and people with relatively minor needs that could have care provided at home, will begin to want to enter public nursing care facilities.

It is feared that the "supply breeds demand" plan of increasing facilities would lead to ballooning nursing care budgets. This is why the Health, Labor and Welfare Ministry has emphasised at-home care in recent years. In April this year, new admission to special nursing homes was limited to care at only Level 3 or higher, on a five-level scale. In principle, "care Level 3" is for elderly people requiring almost full care, including support with toilet needs.

The policy detailed in the memo would also appear to impact insurance premiums for nursing care. The national monthly average insurance premium for basic nursing care insurance paid by those 65 and older was ¥5,514 in fiscal 2015. This number is expected to be ¥6,771 in fiscal 2020 and ¥8,165 in fiscal 2025, though it is believed that "it will soon exceed ¥10,000 if nursing care costs rise."

Even more serious is the shortage of caregiver personnel. According to an estimation by the Health, Labor and Welfare Ministry, 2.53 million workers handling nursing care will be needed in fiscal 2025, though a shortage of 380,000 workers is expected if things remain as they are.

While the government intends to expand the use of workers from overseas, no large-scale acceptance of foreign workers is foreseen. Even with an increase in facilities, shortages in manpower could very well prove detrimental to their operation.

Social security, population issues and fiscal rehabilitation are among the numerous intricately interwoven challenges in the policies being taken on by the prime minister, with no guarantee that a solution will be found.

■ Special nursing home for the elderly

A type of public nursing care facility that does not require upfront payment upon admission and allows subsidies to be received based on the income of the resident, making rates more affordable compared with private fee-based nursing homes. There were about 7,300 special nursing homes across the country with 540,000 residents as of October 2014. The government plans to increase residential capacity to 620,000 by fiscal 2017. Aside from special nursing homes, there are also "attendant" homes where nursing staff are stationed around the clock and "at-home" nursing care, in which a provider is chosen to make house visits to provide nursing care.

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