Kishida unveils new child care plan amid election rumors. On Tuesday, Japanese Prime Minister Fumio Kishida will announce steps to boost the birthrate by raising payouts to families with children.
The introduction of his flagship initiative comes amid market speculation that Kishida may dissolve parliament this week and hold a snap election, which might increase the ruling party’s calls for massive spending.
Analysts think Kishida, who came to office in October 2021, wants to strengthen his party’s grip on power ahead of a leadership vote in September.
Kishida’s press conference may help his party win over voters with promises of rewards.
Kishida wants to increase childcare spending, to 4.7 trillion yen ($33.7 billion), by 2030.
The plan allocates 3.5 trillion yen per year for three years of childcare allowances and support for childcare leave.
According to a draft of the package acquired by Reuters, the government will also encourage enterprises to let workers take three days off a week.
Analysts doubt the package will reverse Japan’s chronic birthrate drop and rapidly aging population.
“While the steps could help families with children, the real problem that must be dealt with is how to support low-income households unable to get married,” said Daiwa Securities chief economist Toru Suehiro.
Kishida has ruled out a near-term tax hike, raising concerns about Japan’s precarious finances.
Officials said the government would figure out secure funding by year-end. Despite government efforts, Japan’s birthrate fell to 1.26 last year from 1.57 in 1990.
