The Japanese government’s plan to give 100,000 yen (about $880) to every resident in the country aged 18 and under is causing turmoil.
The central government has proposed distributing 50,000 yen in cash to households for each child by the end of the year, with the remaining 50,000 yen to come in spring next year in the form of coupons. But many municipalities, which will actually implement the program, have asked for the entire amount to be given out in cash.
The reason for the resistance is that the work related to distributing the coupons will be forced on local governments, even as they work to implement COVID-19 vaccine booster shots. Many looked askance at the estimated 96.7 billion yen (some $851 million) in total administrative costs for the coupon giveaway.
Prime Minister Fumio Kishida stated at a Dec. 13 House of Representatives Budget Committee session that giving out the entire 100,000-yen sum within the year was “one option,” and suggested he was thinking of leaving the final call to local bodies. After the government shift, it appears likely that most local administrations will choose the all-cash option.
In short, the central government’s planning itself was trying to do the impossible.
The 100,000-yen-per-child promise was part of ruling coalition junior partner Komeito’s platform for the Oct. 31 general election. But the payout was then combined with the ruling Liberal Democratic Party (LDP)’s policy package, after the party had spent the election campaign talking up aid for people in need. And this blurred the payouts’ purpose.
The reason the government decided to issue coupons that could only be used to help cover the cost of raising kids was to puncture criticism that it was just throwing money at people. But if the true purpose of the handout is to help with child care, then the key is to create a permanent system. Dividing the subsidy into two has also sparked opposition suspicions that the second installment is a ploy to win voter favor as the next House of Councillors election is scheduled for the summer 2022.
Meanwhile, if the point of the payments is to help Japan’s poor, then they ought to have been implemented this past summer, during the continuing coronavirus state of emergency. In other words, this policy is coming far too late.
If the payments are made all-cash, then the point of the policy again becomes difficult to discern. Last year, every resident of Japan received 100,000 yen in cash aid, but most of that ended up in people’s savings, prompting criticism that the handout did little to energize the pandemic-stricken economy.
Kishida has said the government’s turnaround on the latest cash-versus-coupons clash was “the result of listening carefully to various voices.”
At Kishida’s first Diet party leaders’ question-and-answer session after he formed his administration, the prime minister seems to have sought to demonstrate he had the “strength to listen.” But his policy change on the payments for children suggests his wealth redistribution policies lack a principled core.
Kishida has tried to reason with the public that the coupon giveaway is both a form of direct support for children and a consumption booster. If that’s truly the case, then the government should not shift implementing the handout entirely to local governments, but build a national system as a state responsibility.
The Japanese government must reflect on its last-minute measures, and avoid repeating the chaos surrounding the subsidy program.