Great Amount of Funds

News reports revealed that the amount of money accumulated to “funds” in the supplementary budget submitted to the extraordinary session of the Diet was as much as ¥4.3 trillion. The funds are one of the items in governmental revenue, which spendings does not require any approval of the Diet. If the government cannot spend all amount of fund, the surplus will be automatically postponed next fiscal year. Receiving criticisms that the fund system allows arbitral use of revenue, Fumio Kishida administration starts reviewing of the fund system.

The purpose of those funds is to deal with the mid- or long-term policy issues. The funds are established in the special corporations and their budget is fulfilled with the money from the ministries which oversee the activities of those special corporations. According to a report of Tokyo Shimbun, the total balance of all 190 funds established by the ministries swelled to ¥16.6 trillion at the end of FY 2022, which is the end of this March.

 

Revenue for the funds in the supplemental budget had been as much as some hundreds of million yen before the pandemic. When the government needed to support businesses suffered from paralyzed economy with broad infection of COVID-19, it drastically increased the amount of funds. The amount of revenue for the funds in supplemental budget was ¥10.7 trillion in FY 2020, ¥5.2 trillion in FY 2021, and ¥10.1 trillion in FY 2022.

 

Although the government’s Basic Policy on Economic and Fiscal Management and Reform 2023, determined in June, required fiscal management not to let the emergency spendings prolonged and constant, the government added ¥4.3 trillion to 31 funds this fall. More than a half of whole budget for the funds are overseen by Minister of Economy, Trade and Industry.

 

Those 31 funds include 4 new funds. They are for space development, renewal of digital devices in elementary and junior high-schools, clinical testing of vaccines and development of human resources for cartoon or animation. It is doubtful that all of them have urgent needs to be funded.

 

The biggest deal among the rest of 27 funds is support for semiconductor businesses. Asahi Shimbun reported that ¥677 billion was appropriated to the subsidy for a government-backed chipmaker, Rapidus, and ¥632 billion was for “special semiconductor fund” which included the support for building second factory of TSMC in Kumamoto.

 

In the meeting of administrative projects reviewing of the government, it was reported that a number of the funds did not have schedule on when their projects would end. Prime Minister Kishida ordered Minister in charge of Administrative Reform Taro Kono to review the funds system by the end of this year. It is considered that a fund should be finished within three years.

 

At the beginning of COVID pandemic, there was a scream from the government, “Economy is dying.” Administrations led by Shinzo Abe and Yoshihide Suga have been keen to support businesses, sometimes rather than helping the people’s health and life, facing criticisms of taking care of economy too much. The great amount of balance of the funds can be a result of their METI-oriented policies.

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