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How were the huge subsidies that were paid to local governments to finance COVID-19 measures used and what effect did they have? The local authorities that received the subsidies from the central government need to provide full explanations.
The central government will reportedly ask all local governments to disclose by the end of fiscal 2023 the details of their projects and the effects of the “extraordinary subsidies for regional revitalization” distributed to local governments to battle COVID-19.
The extraordinary subsidies were established in April 2020 as part of an emergency economic package to combat the COVID-19 pandemic. They are intended to enable local governments to implement projects in accordance with their particular circumstances, and have amounted to about ¥17 trillion so far.
Of this figure, about ¥5 trillion is for independent local projects, which can be used freely, in principle, as long as the projects involve measures against COVID-19.
The government may have tried to draw on the originality and creativity of municipalities. Even if this aim is reasonable, securing transparency in the use of such subsidies is a prerequisite, because a large amount of tax money is being used for the aid.
From the beginning, the Cabinet Office has demanded that local governments present results that verify the details and effectiveness of their respective projects.
However, among the 1,788 local governments that have implemented projects with the aid, only 952, or about half, have clearly stated the details of their projects. Only about 40%, or 693, reported their results. It is only natural that the central government has once again requested that this information be made public.
The effectiveness of the funds’ use must also be reviewed, taking into account the opinions of local residents.
Many local governments used the subsidies to distribute masks and provide benefits to needy households.
However, certain measures stand out as being dubiously related to COVID-19 measures.
Examples include the purchase of a tractor for the maintenance of town-owned baseball fields, the installation of cages to capture monkeys that destroy farming fields, replacing official vehicles, and the production of a mascot costume for a city’s official character.
One municipality attracted criticism and significant attention when it spent ¥25 million to create a giant statue of a squid, which is a local specialty.
It might be deemed that the local government intended to revitalize the area’s economy, which has been suffering due to the COVID-19 pandemic. If this is the case, the purpose of creating a large squid statue must be clearly stated and the understanding of local residents must be obtained.
Problems were also found in another subsidy program in which more than ¥3 trillion was provided by the central government to medical institutions in fiscal 2020 and 2021 to secure hospital beds for COVID-19 patients.
The Board of Audit of Japan has cited the existence of “ghost beds” — which were not used for COVID-19 patients due to a shortage of nurses or other reasons, even though COVID-19 subsidies were received — and has urged that the situation be corrected.
The government earmarked about ¥94 trillion for COVID-19 measures from fiscal 2019 to 2021. It should once again thoroughly examine the use of this budget and apply its findings to future infectious disease countermeasures.
