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COVID-19 rent relief measure aimed at recovering Kishida’s lost political ground

  • May 12, 2020
  • , Asahi , p. 4
  • JMH Translation

By Takahiro Okubo and Keishi Nishimura, staff writers

 

One of the pillars of the additional economic measures to deal with the spread of the new coronavirus is rent relief for small and medium-sized firms. The inclusion of rent relief in the measures came about in response to the ruling parties’ moves. Many point out, however, that the measure is a hybrid of two separate plans proposed by the Liberal Democratic Party (LDP) and Komeito and is a product of “Nagatacho logic” in aiming to boost the political standing of LDP Policy Research Council Chairman Fumio Kishida.

 

At a party meeting on May 11, Kishida, the policy chief of the party, announced that the LDP’s rent relief project team would not disband. The team finalized the rent relief plan under Kishida’s guidance last weekend. Kishida kept the project team running in order to keep an eye on the additional economic measures being formulated by the government.

 

A senior Kishida-faction member says that the rent relief plan was an attempt to “recover Kishida’s lost ground.” The previous economic measures enacted in April had put him in a difficult position as he struggled to consolidate the support of the ruling parties. In the end, Kishida failed to unite the party behind the plan to provide 300,000-yen handouts to households with reduced income that he had pursued with Prime Minister Shinzo Abe and had to accept the other plan to provide 100,000-yen handouts to everyone. The defeat left his political maneuvering skills in doubt.

 

On April 21, prior to the passage of the primary supplementary budget for this year, Kishida expressed his intention to initiate discussions on rent relief as an extra economic measure. As “there was no room for failure,” in the words of a senior faction member, Kishida asked a former labor minister and the Kishida faction secretary-general, Takumi Nemoto, to handle the intra-party coordination so that the plan could be finalized in a relatively short period of time. He also consulted with LDP Secretary-General Toshihiro Nikai, who had opposed Kishida in April over the amount of the cash handouts.

 

Kishida’s support plan for tenants, which the project team intended to call the “Kishida Plan,” met with opposition from the government and Komeito, a ruling coalition partner. In Kishida’s LDP plan, tenants would apply for loans from financial institutions and the government would shoulder the portion used for the rent. Some within the government voiced concern over prolonged loan screening and the huge burden on government coffers.

 

Komeito proposed its own framework as well. In its plan, the government would expand the special subsidies (approximately 1 trillion yen) from the previous economic measures to provide financial support to local governments that are implementing measures to help their tenants as well as landlords who have reduced their rents. Some Komeito members claimed, “The sole purpose of the LDP plan is to help Mr. Kishida save face,”.

 

On May 8, while everyone speculated about “whether or not the prime minister would join the face-saving efforts for Kishida,” in the words of a senior Finance Ministry official, the LDP leadership chose an ambiguous solution in which the two parties’ plans were presented side-by-side, and the details of new system were left for the government to decide. The government will soon start hammering out a system for implementing the measure. A Komeito official explains, “We didn’t want this to come back to haunt us later under a ‘Kishida administration’.” A person close to Kishida didn’t hide his or her sense of relief, “We are so glad we were able to produce this result, although it wasn’t easy.”

 

The rent relief measure was a product of “politics,” and its merits were not the deciding factor, according to a senior ruling party member. As such, it might invite criticism of the government and the ruling parties if it results in cumbersome procedures and a lengthy waiting period for the small and medium-sized firms who are already suffering from deteriorating business conditions.

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