The ruling Democratic Party of Japan and the two main opposition parties — the Liberal Democratic Party and Komeito — struck an agreement on Aug. 4 to introduce an income cap for recipients of the child allowance. From fiscal 2012, child-rearing families whose annual income is above ¥9.6 million will not be eligible for the allowance.
The agreement is a concession on the part of the DPJ, which wanted to get cooperation from the LDP and Komeito to pass a bill to float government bonds to finance the fiscal 2011 initial budget. But it is a shameful decision for both the ruling and opposition parties.
By striking the agreement, the DPJ betrayed the principle behind the current child allowance, which the DPJ government has introduced — providing a uniform child allowance to all child-rearing families irrespective of their income levels as a means of the whole society helping every child-rearing family. This policy was one of the DPJ's main election promises that catapulted it into power by defeating the LDP in the August 2009 election. Combining the allowance with progressive tax should rather easily address possible complaints that it is unfair for rich families to receive the allowance and that the cost for the allowance is too big. For municipalities, which have the task of handing the allowance to recipient families, a uniform allowance should be much easier to handle.