Central, local govts clash over form of ¥100,000 benefit

The Yomiuri Shimbun

December 10, 2021

The central and local governments are at odds over a planned benefit equivalent to ¥100,000 for children 18 or younger, as the central government’s announcement that it would provide ¥50,000 of that in the form of coupons caused opposition from local governments that will be tasked with implementing the administrative procedures. The government is scrambling to simplify the process, such as by setting up a system that will allow people to purchase products on a dedicated website.

“Providing [the benefit] in the form of coupon will be the basic policy. However, the system will be made so that it can be provided in cash depending on the situation in each municipality,” Prime Minister Fumio Kishida said at the House of Representative plenary session on Thursday.

Daishiro Yamagiwa, minister in charge of economic revitalization, reaffirmed Friday the government’s stance to allow the provision in cash, saying, “The purpose of the policy will not be understood by the public unless we acknowledge what local governments would like to do.”

The government has not revealed under what circumstances the benefit can be distributed in cash. Deputy Chief Cabinet Secretary Seiji Kihara said at a press conference on Thursday, “We’ll promptly show [the criteria] after the supplementary budget is approved at the Diet.”

The central government will start providing ¥50,000 in cash by the end of the month. The remaining ¥50,000 will be distributed around the start of the new academic year in April, as financial resources for the provision are included in the supplementary budget that is being discussed at the current extraordinary Diet session and local governments will need to make necessary preparations.

The central government is pushing the use of coupons because providing the entire benefit in cash could motivate people to save the money instead of using it, thus not producing the policy’s intended effects of supporting child-rearing and boosting consumption.

The administrative costs for distributing coupons are expected to amount to ¥96.7 billion, far exceeding the related costs of ¥28 billion for cash provision. Also, issuing coupons involves complicated procedures such as placing orders with printing companies and physically distributing the coupons.

“Some local governments may not be ready to distribute coupons by next spring,” a source close to the central government said.

At the lower house plenary session on Thursday, Nobuyuki Baba, cochair of Nippon Ishin no Kai (Japan Innovation Party), criticized the policy. “It’s the utmost foolishness,” Baba said. “I don’t understand why the government insists on coupons. It could cripple local governments.”

The government plans to encourage municipalities to introduce a dedicated shopping website so that their workload will be reduced. It will support each prefecture in setting up a website that sells products in categories such as childcare.

The setting up and operation of the website can be outsourced to the private sector. In the envisaged scheme, recipients of the benefit will be offered electronic points worth ¥50,000 that can be used on the special website.

More local govts prefer cash

More local governments are planning to provide the whole benefit in cash.

“The voices of the people have not reached the prime minister,” Osaka Mayor Ichiro Matsui, who is also head of Nippon Ishin no Kai, said at a press conference on Thursday. Matsui has announced a policy to provide the benefit entirely in cash.

He had earlier said he planned to get the money to most recipients by the end of this year, but he took that back due to the government’s decision to set criteria for the cash provision only after the Diet approves the supplementary budget. “Rather than presenting the criteria, it would be best if [the central government] just authorizes local governments to make decisions.”

The Fujiyoshida municipal government in Yamanashi Prefecture plans to provide ¥50,000 in cash by the end of this month and the remaining ¥50,000, also in cash, later.

“Cash benefits are preferable considering what would be helpful [for households],” Fujiyoshida Mayor Shigeru Horiuchi said on Wednesday.

“Coupons cost more for printing and transportation. It’s ridiculous,” he said.

Otawara in Tochigi Prefecture has decided to provide cash benefits of ¥50,000 twice, after it received phone calls and emails from residents requesting that the benefit be provided in cash.

Chiba City also is considering providing the benefit in cash only.