Japan may delay raising spending on pensions-media

TOKYO, July 11 (Reuters) - The Japanese government and ruling-coalition parties are considering delaying a planned increase in spending on public pensions because it will likely be difficult to raise the consumption tax in the near future, the Nikkei business daily reported on Friday.

The government currently funds slightly more than one-third of the public pension system while the remainder is footed by companies and workers.

The government's contribution to the pension funding is scheduled to rise to 50 percent in April 2009, which will cost it an extra 2.3 trillion yen ($21.5 billion).

But the government is likely to delay the increase at least until October 2009 because it will have no additional source of funding for the rise, the Nikkei said.

Analysts had expected the government to increase the consumption tax, currently at 5 percent, in 2009 partly to deal with the increase in pension funding.

But after the ruling coalition lost a majority in the upper house after an election last year, raising the consumption tax has been seen as politically impossible. ($1=107.09 Yen) (Reporting by Hideyuki Sano; Editing by Chris Gallagher)