Silviase/jgov_v1.4_full_ann huggingface dataset:
1%. So we also examined a 0% inflation case and a -1% inflation case. As we can see from Figures 5 and 6, the provisional and permanent levels will not change from FY 2012 and onward in the 0% inflation case, and so the gap between the two levels will not narrow, which implies no activation of the automatic adjustment mechanism. In the -1% case, both the provisional level and the permanent level will decline by 1% per annum from FY 2013 and onward, and so the gap between the two will not change at all, implying no activation of the automatic adjustment mechanism again.

In terms of the real pension benefit level, the provisional level will start to decline in FY 2013 and so will the permanent level in FY 2015 in our standard 1% inflation case. As we can see from Figures 7 and 8, however, neither the provisional level nor the permanent level will change in 2011 and after. Therefore the gap between the provisional level and the level envisaged in the 2004 Reform will continuously widen in the 2010s.

[Figures 5, 6, 7, 8]

## (7) The contribution side

So far we have seen that the real pension benefit level increases as prices and wages decline. On the contribution side, the actual contribution level is exactly the same as expected in the 2004 Reform in real terms, because the contribution schedule is fully indexed to the before-tax wage level. To be precise, in the case of the Employees' Pension, the contribution amount is a certain percentage, which is scheduled to be raised from 13.58% in FY 2003 to 18.3% in FY 2017 and afterward, of nominal (before tax) wages, and in the case of the National Pension, it is a fixed amount in real terms, which is scheduled to be increased every year from ¥13,300 in FY 2004 to ¥16,900 in FY 2017 and afterward (both in FY2004 wages). In the former case, the amount of contribution is automatically adjusted for (before tax) wage inflation. In the latter case, it is fully indexed to the (before tax) wage level.

[Figure 9, Figure 10]

### 6. Sustainability of Public Pension Schemes Under Different Economic Conditions

(1) The 2009 Verification and the replacement ratio
It is beyond the scope of this paper to thoroughly examine the sustainability of Japan's public pension schemes under various economic and demographic conditions. The Ministry of Health, Labour and Welfare has provided some useful information in this regard, however, in the context of the 2009 Verification.

It is stipulated in the 2004 Reform Law that the government should report the current situation and future prospects of the financial conditions of public pension schemes at least every five years. In this process, the government verifies the financial viability of public pension schemes over a 95-year period from the time of verification, with the target level of the reserve funds at the end of this period being a year's amount of public pension benefits.

In this verification process, a very important concept is the replacement ratio of the Employees' Pension, which is the ratio of the standard pension benefit at the age of 65 to an average disposable income (including bonuses) of the working age male population. The standard pension benefit of the Employees' Pension is defined as the total amount of benefits of a worker who has worked for 40 years and those of his spouse, who has been married to him for 40 years. If the replacement ratio is projected to be below 50.0% within the next five years, the contribution and benefit levels will be thoroughly reexamined. Otherwise, no major reexamination will be made at that point in time.

In sum, in the context of the 2004 Reform and the 2009 Verification, no major reexamination of public pension schemes are required as long as the following two conditions are met. First, the replacement ratio is not projected to fall below 50.0% within the next five years. Second, the reserve funds at the end of the 95-year verification process are equal to or more than the annual amount of their pension benefits.

Incidentally, the replacement ratio actually rose from 59.3% in FY 2004 to 62.3% in FY 2009, although it was expected in the 2004 Reform to decline to 57.5% in FY 2009 and eventually to 50.2% in FY 2023. This clearly reflects the overpayment of public pension benefits in real terms in recent years.

In the basic scenario of the 2009 Verification, which assumed the intermediate demographic and economic conditions, the replacement ratio of Employees' Pension was projected to decrease from 62.3% in FY 2009 to 60.1% in FY 2014 and ultimately to
50.1% in FY 2038 and beyond. So no major revision was made to public pension schemes. In this scenario, the assumed long-term CPI inflation rate, wage inflation rate, and return on investment were 1.0%, 2.5% and 4.1%, respectively.

(2) Different economic assumptions and sustainability of the Employees' Pension

In 2009 the Ministry of Health, Labour and Welfare examined the fiscal sustainability of the Employees' Pension under less-favorable assumptions than the official projection on three economic variables: CPI inflation, wage inflation, and return on investment. Other variables were assumed to be exactly the same as the basic scenario of the official projection. The following cases were considered by the Ministry.

## [Table 4]

Each figure in case a) is the actual average of each variable in the last ten years, and that in case b) is the actual average in the last 20 years. For example, $ \Delta0.2\% $ is the actual average of CPI inflation rate in the last ten years. In cases c), d) and e), only wage inflation is different from the official projection in the 2009 Verification.

In case a), since both the CPI and wage inflation rates are negative, the automatic adjustment mechanism will not be activated. This will have a serious adverse impact on pension finance, and, with an additional negative effect of the low return on investment, the reserve fund of Employees' Pension will be depleted in FY2031. In case b), both the CPI and wage inflation rates are positive but below 1.0%, the automatic adjustment mechanism will be only partially implemented and, again with an additional negative effect of relatively low return on investment, the reserve fund will be depleted in FY 2050. In case c), since the wage inflation rate is zero, the automatic adjustment mechanism will not be activated for newly awarded beneficiaries, and as a result the reserve fund will be depleted in FY 2042. In cases d) and e), since the wage inflation rate is lower than the official projection but positive, the automatic adjustment mechanism will be fully or partially implemented. Fiscal sustainability will not be ensured, however, unless the government will allow the replacement ratio to drop below 50.0% on and after FY 2037, with the required rate of reduction in replacement ratio larger in case d) than in case e). Here the fiscal sustainability is defined as maintaining a year's amount of reserve funds at the end of the 95-year projection period.
Case e) is exactly the same as the official projection except that the rate of wage inflation is only 0.5% lower than the official one. Taking recent wage development in account, 2.0% wage inflation in case e) is probably on the optimistic side. And yet the Employees' Pension is not sustainable under these assumptions unless the replacement ratio will be allowed to drop below 50.0% on and after FY 2037.

### 7. Conclusion

As we have seen, Japan's public pension schemes are extremely vulnerable to deflation. Various economic policies and institutional arrangements in Japan are vulnerable to deflation. They are probably designed on the assumption that inflation is the norm and deflation is an exception, as was the case until the first half of the 1990s. The public pension schemes are the most typical and important example of such institutional arrangements. If the Japanese economy will not be able to escape from deflation for long, this arrangement will have a detrimental impact on the health of public pension finance and on that of the general government fiscal balance as well. The automatic adjustment mechanism, which was introduced in the 2004 Reform to counter the adverse effects of population aging on public pension finance, does not work under deflationary circumstances and works only partially under low inflationary circumstances.

The Japanese public pension schemes seem to be designed on the presumption that a reduction in nominal benefits will not be endured by pension beneficiaries but that a reduction in real benefits will be tolerated by them as long as nominal benefits are not cut. This presumption of money illusion has caused a serious financial problem for public pension schemes in Japan, which has not been able to escape from deflation.

Putting an end to deflation is a first priority, but at the same time it is imperative to improve Japan's public pension schemes to avoid financial impairment by deflation.
## [Appendix 1] Demographic and Economic Assumptions in the 2004 Reform and the 2009 Verification

The short- and medium-term assumptions on CPI and wage inflation in the 2004 Reform and the 2009 Verification are summarized in Table A-1, and their long-term demographic and economic assumptions are summarized in Table A-2.

[Table A-1, Table A-2]

## (1) Data Source for the Short- and Medium-Term Economic Projection

In the 2004 Reform by the Ministry of Health, Labour and Welfare, the short- and medium-term economic projection up till 2008 is based partly on its own estimation and partly on the “Structural Reform and Medium-Term Economic and Fiscal Perspectives — FY2003 Revision” prepared by the Cabinet Office in January 2004.

In the 2009 Verification by the same Ministry, the short- and medium-term economic projection until FY 2015 is based partly on its own estimation and partly on the smooth global economic recovery case (with a VAT hike) of the “Medium- and Long-term Economic and Fiscal Policies and the Outlook for the Next Ten Years — Various Estimations” compiled by the Cabinet Office in January 2009. A value-added tax is assumed to be raised by one percentage point every year from FY 2011 to FY 2015.

## (2) CPI and Wage Inflation

During the five years between 2005 and 2009, the CPI was expected to rise by 1.2% annually on average in the 2004 Reform, but the actual average CPI inflation rate during this period was 0.0%. During the same period, the rate of (before tax) wage inflation was expected to rise by 2.1% annually on average, but it actually fell by 0.3%. It is interesting to note that the assumed long-term nominal wage growth rate was revised upward to 2.5% in the 2009 Verification from 2.1% in the 2004 Reform, in spite of this very weak performance of nominal wages in recent years.

In the 2004 Reform, the projected rate of long-run CPI inflation is 1.0%, which is its 20-year average between 1983 and 2002. The projected long-run rate of real wage growth is 1.1%. In the 2009 Verification, the projected rate of long-run CPI inflation is ___.
1.0%, since this is the BOJ's understanding of price stability in the medium-term. The projected long-run rate of real wage growth is 1.5%, which is equal to the sum of the real GDP growth rate (0.8%) and the rate of decrease in the number of the employed (0.7%).

## (3) Demographic Trend

Regarding the demographic trend, the 2004 Reform adopted the projection by the National Institute of Population and Social Security Research published in January 2002. The total fertility rate was projected to increase slightly, from 1.36 in 2000 to 1.39 in 2050. The average life expectancy was assumed to rise from 77.64 in 2000 to 80.95 in 2050 for male and from 84.62 to 89.22 during the same period for female. The 2009 Verification made use of the projection by the same institute published in December 2006. The total fertility rate was projected to reach 1.26 in 2055. The average life expectancy was projected to become 83.67 for male and 90.34 for female in 2055. On both fertility and longevity accounts, the new projections give a less favorable picture about demographic conditions for public pension finance.
## [Appendix 2] A Bold But More Realistic Estimation of Real Overpayments

As mentioned earlier, the real overpayments in the main text are overestimated, since the 2004 Reform line (the blue line) in Figure 4 underestimates the benefit level envisaged in the 2004 Reform. Both the benefit level of newly awarded beneficiaries and that of already-awarded beneficiaries are assumed to be linked to the CPI in our original estimation. But, in reality, the benefit level of newly awarded beneficiaries is linked to the after-tax wage level and that of already-awarded beneficiaries to the CPI. The after-tax wage level is assumed, in the 2004 Reform, to grow 0.8% faster than the CPI until 2008 and 1.1% faster than that from 2009 and onward. However, to take account of this fact and to get more realistic estimates of real overpayments, bold assumptions on demographic and other factors have to be made.

We made the following assumptions to get more realistic estimates of real overpayments until FY 2015.

1) All pension beneficiaries start to receive pension benefits at age 65.

2) The age distribution of pension beneficiaries is proportional to that of the total Japanese population age 65 and over.

3) Estimated Japanese population age 65 and over until FY 2015 is based on the most recent projection by the National Institute of Population and Social Security Research, published in December 2006.

4) The pension beneficiaries who are initially awarded between FY 2009 and FY 2015 will survive and receive public pension benefits at least until FY 2015.

The results of this more realistic estimation are compared with the original estimates in Table A-3. As we can see from this table, the gap between the actual benefit level and the level envisaged in the 2004 Reform in real terms is smaller in the more realistic scenario than the original scenario, as expected. The difference between the two gaps is minimal in early years but gets larger in later years. It is, for example, 0.1 in FY 2009, 0.2 in FY 2010, but 1.3 in FY 2014 and 1.8 in FY 2015, all in percentage point terms. The real overpayment is proportional to the gap, so it is smaller again in the more realistic scenario. The total real overpayment between FY 2000 and FY 2015 in this scenario is estimated at ¥20.2 trillion, which is equivalent to 4.1% of GDP, while it is estimated at ¥22.9 trillion, which is 4.6% of GDP, in the original scenario.

[Table A-3]
[Table 1] Rates of Inflation and Pension Benefit Levels

(%)

Δp/p	Δ w/w (After tax and s.s.c.)	Change in permanent level	Change in provisional level	Gap
FY 2006 (CY 2005)	Δ0.3	Δ0.3	Δ0.3	Δ0.3	1.7
FY 2007 (CY 2006)	0.3	0.0	0.0	0.0	1.7
FY 2008 (CY 2007)	0.0	Δ0.4	0.0	0.0	1.7
FY 2009 (CY 2008)	1.4	0.9	0.9	0.0	0.8
FY 2010 (CY 2009)	Δ1.4	Δ2.6	Δ1.4	0.0	2.2

Note:

1. $ \Delta p/p $ is the CPI inflation rate and $ \Delta w/w $ is the wage (after tax and social security contribution) inflation rate. These two rates refer to those in a previous calendar year, which is shown in the parentheses.

2. “Gap” is the difference between the provisional level and the permanent level.

3. The underlined rate of inflation was actually applied to the change in the permanent level.
[Table 2] Automatic Adjustment Rate in the 2004 Reform and the 2009 Verification

(%)

FY	2004 Reform	2009 Verification
2008	-0.5	—
2009	-0.8	—
2010	-1.1	—
2011	-1.3	—
2012	-1.3	-1.3
2013	-1.2	-1.4
2014	-1.1	-1.3
2015	-1.1	-1.2
2016	-1.0	-1.1
2017	-0.9	-1.1
2018	-0.8	-1.0
2019	-0.8	-0.9
2020	-0.8	-0.9
2021	-0.8	-0.9
2022	-0.8	-0.9
2023	-0.7	-0.8
2024	—	-0.8
2025	—	-0.9
2026	—	-0.9
2027	—	-1.0
2028	—	-1.0
2029	—	-1.1
2030	—	-1.2
2031	—	-1.3
2032	—	-1.4
2033	—	-1.5
2034	—	-1.7
2035	—	-1.8
2036	—	-1.9
2037	—	-2.0
2038	—	-2.0

Note: In the 2009 Verification, the adjustment of earnings-related benefit level is to be terminated in FY2019.
[Table 3] Sensitivity of Nominal Overpayment/Nominal GDP (FY 2000~FY 2015)

Nominal GDP growth
Growth in total pension benefits	1%	2%	3%
2%	2.14%	2.12%	2.09%
3%	2.19%	2.16%	2.14%
4%	2.23%	2.21%	2.18%

[Table 4] Different Assumptions on Inflation and Return on Investment

Case	CPI inflation	Wage Inflation	Return on Investment
a)	$ \Delta $ 0.2%	$ \Delta $ 0.7%	1.5%
b)	0.7%	0.6%	2.9%
c)	1.0%	0.0%	4.1%
d)	1.0%	1.0%	4.1%
e)	1.0%	2.0%	4.1%
a) The 2004 Reform

(%)

$ \Delta p/p $	$ \Delta w/w $	$ \Delta w/w $ (real)
2003	-0.3 (actual)	0.0	0.3
2004	-0.2	0.6	0.8
2005	0.5	1.3	0.8
2006	1.2	2.0	0.8
2007	1.5	2.3	0.8
2008	1.9	2.7	0.8
(Long-term) 2009~	1.0	2.1	1.1

Note: $ \Delta w/w $ is wage inflation before tax and social security contribution.

b) The 2009 Verification

(%)

$ \Delta p/p $	$ \Delta w/w $	$ \Delta w/w $ (real)
2008	1.4 (actual)	-0.1	-1.5
2009	-0.4	0.1	0.5
2010	0.2	3.4	3.2
2011	1.4	2.7	1.3
2012	1.5	2.8	1.3
2013	1.8	2.6	0.8
2014	2.2	2.7	0.5
2015	2.5	2.8	0.3
(Long-term) 2016~	1.0	2.5	1.5

Note: $ \Delta w/w $ is wage inflation before tax and social security contribution.
[Table A-2] Long-Term Demographic and Economic Assumptions — Intermediate Case —

2004 Reform	2009 Verification
Total Fertility Rate	2000 (actual)	1.36	2005 (actual)	1.26
2050	1.39	2055	1.26
Life Expectancy	2000 (actual)	2005 (actual)
male	77.64	male	78.53
female	84.62	female	85.49
2050	2055
male	80.95	male	83.67
female	89.22	female	90.34
CPI Inflation	1.0%	1.0%
Wage Inflation	2.1%	2.5%
Yield on Investment	3.2%	4.1%

Note: Short- and medium-term economic assumptions are different from those long-term assumptions.
[Table A-3] Original and More Realistic Estimates of Real Overpayments

<Original>	<More Realistic>
Gap $ ^{1)} $ (%)	Overpayment $ ^{2)} $ (₹trillion)	Overpayment $ ^{3)} $ (% of GDP)	Gap $ ^{1)} $ (%)	Overpayment $ ^{2)} $ (₹trillion)	Overpayment $ ^{3)} $ (% of GDP)
FY2009	1.3	0.6	0.1	1.3	0.6	0.1
FY2010	3.7	1.8	0.4	3.5	1.7	0.3
FY2011	4.9	2.4	0.5	4.6	2.3	0.5
FY2012	5.8	3.0	0.6	5.3	2.7	0.5
FY2013	5.8	3.0	0.6	4.9	2.6	0.5
FY2014	5.8	3.1	0.6	4.5	2.4	0.5
FY2015	5.8	3.1	0.6	4.1	2.2	0.4
FY2000~2015	—	22.9	4.6	—	20.2	4.1

Note:

1) The gap between the actual real benefit level and the real benefit level envisaged in the 2004 Reform.

2) Real overpayment in FY1999 prices.

3) Real overpayment as % of FY1999 GDP.
[Figure 1]

Note:

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.

2. The benefit level in FY 1999 = 100.
[Figure 2] CPI/Wage Inflation and Permanent Benefit Level

## Note:

1. All figures are hypothetical.

2. “New” indicates newly awarded beneficiaries and “other” indicates already-awarded beneficiaries.
[Figure 3] CPI/Wage Inflation and Actual Automatic Adjustment
[Figure 4]

Note:

2. The benefit level in FY 1999 = 100.

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.
[Figure 5]

Note:

2. The benefit level in FY 1999 = 100.

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.
[Figure 6]

Note:

2. The benefit level in FY 1999 = 100.

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.
[Figure 7]

Note:

2. The benefit level in FY 1999 = 100.

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.
[Figure 8]

Note:

2. The benefit level in FY 1999 = 100.

1. Figures until FY 2010 are actual and those for FY 2011 and beyond are projection.
[Figure 9]
[Figure 10]
## 主な増減内容

## 総務省 平成25年度省庁別財務書類の概要

省庁別財務書類について

一般会計及び特別会計を合算した総務省の財務状況を開示。

2. 作成方法

「省庁別財務書類の作成基準」に基づき作成(省庁内部における取引等を相殺消去)。

3. 各財務書類の表す財務情報

（貸借対照表）

資産及び負債の状況を開示。

(業務費用計算書)

本年度に発生した費用の状況を開示。

（資產·負債差額增減計算書）

貸借対照表の前年度末資産・負債差額と本年度末資産・負債差額の増減を要因別に開示。

（区分別收支計算書）

歳入歳出決算の財政資金の流れを区分別に開示。

## 総務省の業務等の概要

総務省は、行政組織、公務員制度、地方行財政、選挙、消防防災、情報通信、郵政事業など、国家の基本的仕組みに関わる諸制度、国民の経済・社会活動を支える基本的システムを所管し、国民生活の基盤に広く関わる行政機能を担う。

【定員数】5,231人

【主な財政資金の流れ】

・一般会計から交付税及び譲与税配付金特別会計へ繰入：17 兆 1,780 億円

公債関連情報(仮定計算により算定)

公債発行対象経費及び歳出決算額の累計額等を基礎として配分される本年度末公債残高 34 兆 8,713 億円、本年度公債発行額 7,151 億円、本年度利払費 3,800 億円

貸借対照表

前年度	25年度	增減	前年度	25年度	增減
資産の部>	<負債の部>
現金・預金	1,387	2,312	924	未払金等	124	109
未収金等	0	0	0	賞与引当金	2	2
貸倒引当金	△0	△0	0	借入金	33,417	33,317
有形固定資産	212	232	19	退職給付引当金	87	79
国有財産(公共用財産除<)	149	149	0	恩給引当金	2,587	2,205
物品	63	83	19	その他の負債	0	6
無形固定資産	6	7	1
出資金	4,600	4,987	386
その他の資産	3	2	△1
負債合計	36,219	35,720
<資産・負債差額の部>
資産・負債差額	△30,008	△28,178
負債及び資産・負債差額合計	6,210	7,542
資産合計	6,210	7,542	1,331

前年度	25年度	增減
人件費	44	42	△1
退職給付引当金等線入額	6	5	△1
恩給引当金線入額等	△55	94	150
補助金等	107	1,526	1,419
委託費等	139	135	△4
運営費交付金	37	37	△0
政党助成費	32	31	△0
地方交付稅交付金等	20,688	20,279	△408
庁費等	47	34	△12
減価償却費	21	20	△1
貸倒引当金線入額	△0	0	0
支払利息	52	51	△1
資産処分損益	0	△0	△0
その他の業務費用	2	2	△0

(单位:十億円)

業務費用計算書

(单位:十億円)

資產・負債差額増減計算書 (単位:十億円)

前年度	25年度	增減
前年度末資産・負債差額	△30,552	△30,008	543
本年度業務費用合計（A）	△21,124	△22,262	△1,137
財源合計（B）	21,146	23,693	2,547
租稅等財源	2,395	2,666	270
その他の財源	18,400	20,377	1,976
他会計からの受入	350	650	300
無償所管換等	15	11	△3
資産評価差額等	506	386	△119

区分別收支計算書

(单位:十億円)

前年度	25年度	增減
業務収支	1,540	2,463	923
財源	23,209	25,081	1,871
業務支出	△21,669	△22,617	△947
財務収支	△153	△151	1
公債発行等収入	33,417	33,317	△100
公債償還等支出	△33,570	△33,469	101
本年度収支(業務収支+財務収支)	1,387	2,312	924
資金への繰入等	1,387	2,312	924
本年度末現金·預金残高	1,387	2,312	924

主な科目の内訳

（カッコ内は前年度からの増減額）
（貸借対照表）
・借入金	33 兆 3,172 億円（△1,000 億円）
…民間借入金	23 兆 1,000 億円（△0 億円）

2. 業務費用計算書

・補助金等… 補助金等の増 1 兆 4,194 億円

・地方交付税交付金等… △4,089 億円

・地方交付税交付金の減 △6,943 億円

・地方議与税譲与金の増 2,873 億円

・恩給引当金繰入額の増 1,501 億円

3. 資産・負債差額増減計算書

・本年度業務費用合計と財源合計との差額

1 兆 4,312 億円

(左記(A) + (B)により算出)

⇒企業会計の「当期純利益」に相当

4. 区分別収支計算書
・財源…	配賦財源の増	1 兆 9,764 億円
・業務支出…
・補助金等の増	1 兆 4,194 億円
・地方交付税交付金の減	△6,943 億円
・地方譲与税譲与金の増	2,873 億円
・恩給費の減	△622 億円
・財務収支…
公債償還等支出(利息支払額)の減
△12 億円
・本年度収支(業務収支＋財務収支)の増
9,248 億円
・資金への繰入等の増	9,248 億円