"Abolish it." Just three years after its launch, Japan's flagship agency for children's policy is under siege. The Children and Families Agency (CFA), created in 2023 and now running a ¥7.5 trillion ($50 billion) annual budget, faces calls for dissolution from an increasingly frustrated public. Online petitions demand its dismantling. Social media seethes over an alleged "singles tax." And Japan's births keep falling to record lows. What went wrong, and can any country actually solve the fertility crisis?

What Is the Children and Families Agency?

The Children and Families Agency (Kodomo Katei-chō) was established in April 2023 under the administration of then-Prime Minister Fumio Kishida. It brought together child-related departments previously scattered across the Ministry of Health, Labour and Welfare and the Cabinet Office, aiming to serve as the "control tower" for all children's policy, from declining birth rates to child abuse prevention and anti-bullying measures.

Under the slogan "Kodomo Mannaka Shakai" (a society with children at its center), the agency promised to break through Japan's notorious bureaucratic silos. It achieved some early results, including better pay for nursery workers and a sharp drop in daycare waiting lists. But three years on, the mood around it has shifted dramatically.

Why Abolition Calls Are Growing

The "Singles Tax" Backlash

The turning point came when details emerged about the "Child and Childcare Support Contribution," a surcharge added to public health insurance premiums to fund birthrate measures, taking full effect in fiscal 2026. Since the fee applies to everyone regardless of whether they have children, it triggered fierce backlash, particularly from single people and childless households.

Social media erupted with accusations that the policy amounts to a "singles tax," effectively punishing people for not having children. The rage quickly transferred to the CFA itself.

The $50 Billion Budget Question

The CFA's fiscal 2026 budget totals ¥7,495.6 billion, roughly ¥7.5 trillion (about $50 billion). Critics compared this to the Digital Agency, a similarly sized organization with a budget of about ¥500 billion ($3.3 billion), some 15 times smaller.

On X, posts claiming that "disbanding the CFA and giving each newborn ¥10 million ($67,000) would be more useful" went viral. Others calculated that abolishing the agency could fund a ¥107,000 ($710) annual tax cut per worker.

A closer look reveals a different picture. The largest budget items are daycare and after-school club operating costs (¥2.6 trillion), child allowance payments (¥2.1 trillion), and parental leave benefits (¥1.1 trillion). Those three account for about 77% of the total: essential services that would continue regardless of whether the agency exists.

As one former cabinet minister observed, "In a time of economic hardship, public distrust of politics is being directed at the youngest agency in the government."

A Minister Juggling Nine Portfolios

Under Prime Minister Sanae Takaichi, who took office in October 2025, children's policy falls to Hitoshi Kikawada, a minister of state whose brief also covers Okinawa and Northern Territories affairs, consumer affairs and food safety, the declining birthrate, youth empowerment, gender equality, regional revitalization, Ainu policy, and community-based welfare: nine areas in all. The arrangement carried over into Takaichi's second cabinet, formed in February 2026. Few read that as a sign of political priority.

The optics had already soured on October 17, 2025, under the previous Ishiba cabinet, when then-Children's Policy Minister Junko Mihara held a press conference that lasted roughly 30 seconds. She stated, "I have nothing in particular to report," and left without a single question from reporters. The video went viral, crystallizing public frustration about an agency then running a ¥7.3 trillion budget with apparently nothing to announce.

The AI Failure and Questionable Programs

Further fueling criticism, the CFA spent ¥1 billion ($6.7 million) developing an AI system for child abuse detection that proved too inaccurate to deploy. Programs like "kazoku ryūgaku" (family study-abroad), in which young people visit child-rearing households, and priority lanes for families at national museums were ridiculed as disconnected from real needs.

An online petition on change.org demanding the agency's dissolution has gathered support, arguing that the CFA "has failed to deliver the results expected of it and has instead become a waste of taxpayer money."

The Unstoppable Decline in Births

Underlying the criticism is an uncomfortable truth: Japan's birth rate simply will not stop falling.

Japan recorded 671,236 births in 2025, according to the Ministry of Health, Labour and Welfare's vital statistics released in June 2026: a record low for the 10th consecutive year. The 2.2% year-on-year decline was gentler than the 5%-plus drops of recent years, but the level itself is stark. The total fertility rate slipped to 1.14, another record low, and Tokyo fell to 0.96, below 1.0 for a third straight year.

The figure badly undershoots the National Institute of Population and Social Security Research's 2023 mid-range projection of 749,000 births for 2025. That projection did not expect the 670,000 range until around 2040, meaning Japan arrived there 15 years early. With 1,589,489 deaths, the "natural decrease" reached 918,253, a 19th consecutive year of shrinkage.

Marriages edged up for a second straight year, to 489,119, but remain flat at historically low levels. With the average time between marriage and first birth stretching to 2.8 years, any positive effect on births will take years to materialize.

How Other Countries Are Tackling the Crisis

South Korea: The 100-Million-Won Baby Bonus

South Korea faces an even more severe demographic crisis than Japan: its 2025 fertility rate was 0.80, against Japan's 1.14. In response, Korean companies have launched extraordinary private-sector initiatives.

Construction giant Booyoung Group began paying employees 100 million won (about ¥11 million, roughly $70,000) for every child born, starting in 2024, with no cap on additional children. The company reports that births among staff rose more than 50% after the program began, and job applications surged tenfold.

The Korean government has surveyed public opinion on a state-funded 100-million-won payment per child, with 62.6% of respondents saying it would motivate them to have children. Seoul launched a 3.2 trillion won ($2.2 billion) "Birth Celebration Project" in 2025, offering housing support for renters and 1,000-won (about $0.70) apartments, among other bold measures.

Yet Korea spent 280 trillion won (roughly ¥30 trillion, about $200 billion) on fertility measures from 2006 to 2021 with no clear results, a sign that money alone cannot solve the problem.

The Nordic Model: When the "Success Story" Stops Working

The Nordic countries (Sweden, Denmark, Norway, Finland, and Iceland) were long held up as the gold standard for family-friendly policy. With generous parental leave, subsidized childcare, and universal healthcare, they maintained fertility rates between 1.7 and 2.3 from the 1980s through about 2010.

But since the 2008 financial crisis, Nordic fertility has dropped sharply. Finland's rate has fallen below 1.3, now below the EU average. A researcher at Finland's social insurance agency Kela admitted: "We can no longer say that our good family policies explain good fertility in the Nordics."

Researchers have identified what they call the "New Nordic Paradox." Nordic welfare states genuinely help parents, primarily by enabling both mothers and fathers to work. Yet the parental contribution ratio, what parents bear relative to total child-rearing costs, is among the highest in Europe in Sweden and Finland. The help is real, but it comes with a large tax bill attached.

An emerging theory points to "workism," the rising cultural weight placed on career and professional achievement. In Finland, where the importance people assign to work has climbed the most, fertility has fallen the most. When work becomes the primary source of identity, the perceived cost of having children grows beyond money.

The Common Thread

What Japan, South Korea, and even the Nordics share is a sobering reality: financial support alone cannot reverse declining birth rates.

Soaring housing costs, long working hours, the difficulty of balancing careers and childcare, economic insecurity among young people, shifting values around family and personal fulfillment: these interconnected factors are raising the bar for choosing parenthood in every developed nation.

What Comes Next for the CFA

The Children and Families Agency is preparing new initiatives, including the full-scale launch of its "Universal Nursery Access" program (kodomo daremo tsūen seido) in fiscal 2026. The agency has also pushed back against "middleman skimming" accusations, noting that contracted services represent just 0.06% of its total budget, the lowest proportion of any government ministry.

With marriage numbers showing a slight uptick, CFA officials express cautious optimism that "a shift in declining birthrate trends may emerge in the next year or two." But demographic changes take years to materialize, and the public's patience is wearing thin.

Behind the abolition debate lies something deeper than criticism of a single agency: a profound sense of frustration across Japanese society. Whether the CFA can demonstrate meaningful results for the "children-first" society it promised is a question that speaks to Japan's very future.

What measures does your country take to combat declining birth rates? Are government policies making a difference? We'd love to hear about the situation where you live.

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