When talking about reforming the healthcare system, the starting point of the discussion is often the increase in the demand for healthcare services and rising medical expenses as the population ages, with claims that “we therefore must increase insurance premiums,” “we therefore must increase the consumption tax rate,” and “we therefore must increase the number of facilities providing medical services and nursing care services” being common. Instead, what we should be asking ourselves is how can we change the healthcare system so that we can live healthier and longer lives without it costing so much.

The number of babies born in 2014 in Japan was a record low of 1,003,539 and the birthrate was 1.41, significantly lower than the 2.08 necessary to maintain the population. As a result, it is projected that the Japanese population will decrease to 95 million in 2050 and 47 million in 2100. The declining birthrate and aging population are the most serious issues facing Japan. We need to recognize this situation as one critical enough to shake the foundations of Japanese society.

Referring to “grants in money,” Sontoku Ninomiya once said, “Such help only induces avarice and indolence, and is a fruitful source of dissensions among the people … poverty must be made to rescue itself” (excerpted from Representative Men of Japan by Kanzo Uchimura). The number of welfare recipients reached a record high of 2,170,000 in 2015, exceeding the number during the post-war reconstruction period, and public funds spent on welfare have increased to 3.8 trillion yen. The system should be reformed to incorporate incentives that encourage people to become independent and to pull themselves out of poverty.

The long-term care insurance system was introduced in 2000. In the beginning, the amount of benefits was 3.6 trillion yen and the average premium was 2,911 yen. At present, the amount of benefits is 9.4 trillion yen and the average premium is 4,972 yen. According to the estimate of the Ministry of Health, Labour and Welfare, the amount of benefits will be 21 trillion yen and the average premium will be about 8,200 yen ten years from now. It is necessary to address the continuous increase in nursing care costs not by continuing to increase premiums but by reforming the system with a view to controlling the increasing costs.

Do you know the age of Namihei Isono, the father of Sazae-san (of the famous manga & TV series)? He was a full-time employee during Japan’s period of high economic growth and his wife was a full-time housewife. The population pyramid of the large Isono family was triangular in shape, as was the population pyramid of Japan. It may come as a surprise, but Namihei was 54 years old! He was in his 50s and already an old man who would soon reach the mandatory retirement age and go on the pension. Since that time, society has changed significantly. To respond to these changes in society, the pension system should also be reformed.

The universal health insurance system is one that Japan can be proud of. It is estimated, however, that national healthcare expenditures will increase on the scale of one trillion yen every year to reach 54 trillion yen in 2025. In a society with a low-growth economy and a decreasing population, maintaining the current level of welfare constitutes nothing less than the exploitation of future generations. To achieve a sustainable healthcare system, it is necessary to incorporate incentives into the system to reduce medical costs and maintain our collective health.

In 2015 the Nikkei Stock Average, which in 2012 was almost as low as 9,000 yen, recovered to over 20,000 yen at one point. The Bank of Japan’s “new dimension in monetary easing” somehow succeeded in changing people’s mindset. Having said that, the initial commitment of a 2% inflation rate within two years has not been achieved. Nevertheless, having adopted this policy, the government has a responsibility to restore the Japanese economy to a solid growth trajectory as part of its monetary and economic policy.

A British thinktank published a “Global Financial Centres Index” ranking financial centers in 79 cities and territories around the world according to their international competitiveness. First was London, second was New York, third was Hong Kong, and fourth was Singapore. Tokyo was in sixth place, but came in third for the number of companies listed on its stock market. A structure for increasing investment in Tokyo needs to be created. For example, Tokyo needs to actively attract foreign financial institutions and become home to large numbers of investors and analysts from overseas.

As of 2015, personal financial assets in Japan amounted to 1,708 trillion yen, while corporate retained earnings stood at 354 trillion yen. Despite this, Japan’s money and capital markets are weak by international standards. This is because 1,500 trillion yen in personal assets, corporate savings, pension funds, and university endowments is not being invested as risk money. We therefore want to propose policies for restoring Tokyo’s position as Asia’s top financial market.

In 1990, just before the collapse of the bubble economy, Japan’s tax revenue was 60.1 trillion yen, but by 2009 it had slumped to 38.4 trillion yen. In Japan there’s an expression: “tax is the nation.” What it means is that the behavior of people and companies is heavily influenced by the tax system. In the globalized world of today, an urgent task is to transform Japan’s tax system with reference to international standards in order to ensure that economic growth benefits the national coffers.