The public is struggling with rising prices. In response, the Takaichi Sanae administration has implemented emergency measures. One of these measures is the expansion of the “Priority Support Local Grants.” This economic stimulus package secured 2 trillion yen in local grants, which local governments can use freely. The government has proposed various options, including premium gift certificates, rice coupons, and subsidies to households using PL gas. Despite calls for the distribution of “rice coupons,” local governments have voiced concerns that this is not an easy task. Distributing gift certificates to residents requires each local government to prepare a supplementary budget and go through procedures in the local assembly. Even after the decision is made, there is still administrative work involved, such as issuing gift certificates, explaining the program to eligible stores, and informing citizens. No matter how quickly the process is implemented, emergency price control measures will likely not be implemented until after March.
The deeper roots of the problem appear to be spreading from the “rice coupons.” First, distributing rice coupons is not an emergency measure. Second, distributing them encourages rice prices to remain high. Third, it seems to boil down to the increased administrative costs and burden on local government employees that would be required for distribution. A growing number of local governments have decided not to distribute rice coupons funded by the government’s Priority Support Local Grants. Currently, rice coupons are sold for 500 yen each and can be exchanged for 440 yen worth of rice. The 500 yen in grant money is not being given directly to the public. The remaining 60 yen goes toward printing costs and the issuer’s profit. The full amount will not be distributed to the public.
This uproar calls to mind the confusion surrounding the special 100,000 yen grant to all citizens during the COVID-19 pandemic. Due to confusing online procedures, many people gave up before even applying. This contrasts with Germany and neighboring South Korea, which distributed COVID-19 relief funds to all citizens within two days. Introducing the My Number system is an effective procedure. With the proper formatting, My Number cards have the advantage of being completed quickly in a single procedure. Effective use of My Number cards will enable efficient social security, tax payments, and disaster relief payments. Just like Germany, all administrative processing, including payments, can be completed within two days. This will also reduce administrative costs and the burden on employees. The typical approach to IT adoption in companies has been to “change work methods to fit the system.” Japan, too, should change its administrative practices and move toward promoting digitalization at the same level as businesses.
