Eyeing election, Abe aims to use tax revenue growth for free education

September 20, 2017

TOKYO- Japanese Prime Minister Shinzo Abe now plans to use increased government revenue from the planned consumption tax increase in October 2019 for realizing free education, informed sources said Tuesday.

Abe, thus, aims to change the agreed usage of the increased revenue to attract votes in an imminent election of the House of Representatives, the all-important lower chamber of the Diet, the sources said.

According to the 2012 agreement among the then ruling Democratic Party of Japan, now the Democratic Party, the Liberal Democratic Party and Komeito, only 20 pct, or some 3 trillion yen, of the increased portion of consumption tax revenue will be used for improving social security services, while the rest will be for government debt repayment and contribution to the state pension program.

But Abe, who is poised to break up the Lower House next week for a snap general election on Oct. 22, aims to utilize the planned tax increase to realize free education, one of pillars of his latest "human resource development revolution" policy, sources at his LDP said.

Estimates show that some 730 billion yen will be needed each year to make preschool education programs covering children aged 3-5 free of charge. Furthermore, the government will have to spend 3.7 trillion yen a year for realizing free higher education.

Abe plans to allocate a larger portion of the increased consumption tax income to social security programs and include free education in the programs.

If the government reduces the allocation for debt repayments, however, it will certainly slow its fiscal consolidation efforts and push back the goal of achieving a primary budget surplus in fiscal 2020, critics said. Jiji Press