Japan's Upper House Committee Approves Pension Bill

Reviewed by Hitoshi URABE

Article:
"Japan's Upper House Committee Approves Pension Bill"
Bloomberg
http://quote.bloomberg.com/apps/news?pid=10000101&sid=a0Y03.4azAu4&refer=japan

Comments:

The current 159th session of the diet is scheduled to end in ten days. Accordingly, the bills are being hastily processed for votes of approval.

One of the most controversial bills presented at this session was a proposal to privatize Japan Highway Public Corporation and revise the whole system of highway construction, so that it would not become a source of bringing down Japan financially. With accumulated debt of 40 trillion yen, and interest groups always demanding construction of new highways having no economic feasibility, the reform was expected to reset the entire sector on the right track.

But it was found to be a losing battle. Apparently, the members of the parliament, all elected, felt it necessary to keep entertaining their constituencies, so not many had the guts to tell the people back home that no more highways would be built by public money to serve their homes. Thus the bill, passed without hassle a few days ago, was a disappointment to those hoped for a true reform in this regard. In fact, critics point out that the new framework to be set up will be more vulnerable than now to the demands based on regional egos.

Another very controversial bill was the reform of the national pension system, as mentioned in the article introduced above. Simple arithmetic would reveal that the pension system, as it has been operated, would become unsustainable in the near future. This was supposed to be a very important issue, to provide security for the aging people while explaining visions of future to younger generation.

The debate, however, went astray. There were bureaucrats who tried to window dress the numbers, perhaps in the aim to turn away possible accusations of their having run the program poorly until now. Then there were politicians who were afraid of telling the people the critical and uncomfortable state of the program. The high point was the succession of revelations of lawmakers evading payment of pension premiums, which, among other things, resulted in the resignation of the head of the major opposition, Mr Kan of DPJ.

Mr Kan's resignation had brought another complexity into the picture. Immediately before his resignation, Mr Kan compromised and agreed to support the bill presented by the government a.k.a. the ruling LDP and Komeito. But upon Mr Kan's resignation, opposers within DPJ overturned the decision and chose to vote against the pension bill.

The people's perception is not as simplistic in the sense as to whether they support the bill or not. People are frustrated with the fact that the ever more important pension issue was not scrutinized and debated thoroughly by the lawmakers. People are well aware that the current system is unsustainable, and are anxious as to what to do with it. But the soft and overly optimistic numbers presented by bureaucrats which was further obscured by political struggles made it impossible for the people to assess the core of the issue.

Some say that there is a reason for the politicians to adopt such a hasty, if not cowardice, attitude. Lawmakers' minds are filled with the upper house election coming up next month, which has driven their actions to fall on the protective side, avoiding the risk of becoming unpopular in their constituencies. But if the politicians, including Mr Koizumi and the LDP, continue to evade scrutiny of the people and treat them as ignorant mass, it could backlash, not necessarily by way of a revolt, but in a more grave manner of disenchantment toward society and the country, which some point to the ever decreasing voter turnout at elections as a sign of the trend already begun.