To ensure the long-term sustainability of the nation’s social security system, constructive discussions must be held on the matter.

The Democratic Party of Japan, the Liberal Democratic Party and New Komeito have agreed on the establishment of a “national council to revamp the social security system.”

Under the Social Security System Reform Promotion Law, which will go into force shortly, the council will not exist longer than one year from the date of the enforcement of the law.

However, some LDP lawmakers argue that the council should be launched by the new government that will be created after the next House of Representatives election.

No decision has been made concerning the composition of the council: whether it should exclusively comprise scholars and other intellectuals from outside the Diet or whether representatives from political parties should be included.

Ironing out the differences in views will likely face rough going.

To allow sufficient time to discuss the specifics of the envisioned reform, the timetable to launch the council should be set before the current Diet session ends on Sept. 8.

High on the agenda of the new council will be the handling of two items the DPJ set forth in its policy pledges for the 2009 general election. They are creation of a new pension system and scrapping the health care system for the so-called latter-stage elderly ― individuals aged 75 and older.

Although the DPJ’s argument leaves something to be desired, the party’s stance may lead to constructive debate following its agreement with the LDP and Komeito on the need for reform.

Earlier, the DPJ insisted that the social security system should be financed entirely by tax revenues. The DPJ has since modified its position in favor of making individuals’ pension insurance premiums the main revenue source for the new system, which the party calls a “common pension plan” that would integrate government and private-sector employee pension schemes.

This means the DPJ’s position is now closer to that favored by the LDP and Komeito, which seek to apply a premium-levying formula to improve the current pension system.

The DPJ, however, insists on creating a minimum-guaranteed pension system under which 70,000 yen per month would be paid to every beneficiary in addition to the common pension plan.

If the minimum pension program was funded entirely by tax revenues, the consumption tax rate would have to be raised by a maximum of 7.1 percentage points above the planned doubling of the rate to 10 percent.

Given the increasingly stringent government finances, the DPJ’s idea is hardly feasible.

Discussions on the national council should center around improving the current premium-based pension system.

The DPJ also wants latter-stage elderly health care replaced by a system designed to put medical expenses for these senior citizens into a separate fiscal category. This is aimed at pressing prefectural and other local entities to address the task of reducing burgeoning medical costs for the aged, a line of thought much in common with the current system.

Considering that the emotional reaction the public earlier showed to the term “latter-stage elderly” has ameliorated markedly recently, there seems to be no need to do away with the system in the review of health care arrangements for the elderly. What is important is to have debates truly conducive to improving the existing system.

A focal point in discussions on the national council should be how to make the health care system for the elderly more efficient.

Government funding for health care expenses must be prevented from ballooning by having the elderly shoulder more of the financial burden, such as by raising the amount the latter-stage elderly should pay when they seek medical treatment from the current 10 percent to 20 percent, the rate that was in place before the current system was introduced.

The DPJ, the LDP and Komeito should never forget they are all responsible for ensuring that public trust in the social security system remains unshakable.

(The Yomiuri Shimbun)