Japan govt eyes new budget account focused on childcare spending - media

Local children play on Japan's westernmost inhabited Yonaguni Island in Yonaguni, Okinawa

TOKYO (Reuters) - Japan's government may set up a new budget account to manage spending linked to childcare funding reforms, the Nikkei business daily reported on Monday.

Prime Minister Fumio Kishida has pledged to double childcare spending to reverse Japan's dwindling birthrate, by making it easier for a both married couple to work and the husband to take paternal leave so that they can share household chores more fairly.

The new account will be created through a partial merger of two existing accounts, for the welfare ministry and the childcare household agency, to be run by the latter and giving it more flexibility in earmarking spending, the Nikkei said.

The new account will come on top of existing 13 special budgets Japan has put in place.

However, the government is struggling to secure permanent sources of funding for the planned childcare spending, which some lawmakers estimated to cost 8 trillion yen to accomplish, in light of another new spending programme to double defence outlay over the next three years.

In parallel, the government has promised to achieve a primary budget surplus excluding new bond sales and debt servicing costs by the fiscal year ending in March 2026.

Rounds of heavy fiscal stimulus over the past years in response to the COVID outbreak have saddled Japan with public debt that tops 250% of annual economic output, by far the heaviest in the industrialised world.

(Reporting by Tetsushi Kajimoto; editing by John Stonestreet)