Japan Press Weekly

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2017 November 29 - December 5 [POLITICS]

LDP relies on tax-funded gov't subsidy for 72% of income

The ratio of the Liberal Democratic Party's income from tax-funded government subsidies to its total income has increased by six percentage points from a year earlier to 72.3% in 2016, revealing the LDP's growing dependence on the tax.

According to the political funds report the Ministry of Internal Affairs released on November 30, the LDP headquarters' annual revenue in 2016 amounted to 24.12 billion yen, of which 17.44 billion yen came from government subsidies to political parties, up 387.2 million yen from the previous year.

Given that public funding granted to political parties comprises a tax of 250 yen per capita, all parties should basically return any left-over money to the state coffers. However, no party does so because the Political Party Subsidy Law makes it possible to carry unused funds over to the following year as "fund balances."

The LDP by using this loophole, as of the end of 2016, hoarded 11.42 billion yen in fund balances.

The party also collected 2.69 billion yen in political donations from more than 1,100 companies and organizations, amounting to 9.5% of its total income.

Three megabank groups provided 20 million yen each in donations to the LDP. Toray Industries, Inc., which is currently under fire for falsifying quality test data, donated 50 million yen. Toray's senior advisor is Sakakibara Sadayuki, the chairman of the largest business lobby, the Japan Business Federation (JBF or Keidanren), who is pushing Prime Minister Abe Shinzo to raise the consumption tax and cut social welfare programs. Like Toray, falsification scandal-tainted Kobe Steel Ltd. gave 10 million yen in donations and Nissan Motor Co., Ltd. where unqualified employees performed safety inspections of new vehicles, 35 million yen.

On top of that, out of the top ten organizations earning a high income from fundraising parties, eight were of LDP politicians. Topping the list is LDP Secretary General Nikai Toshihiro's faction. In his case, one fundraising event raised 143.3 million yen.

Politicians' individual fund-managing bodies often hold parties to raise funds by selling event tickets to companies, organizations, business executives, and persons of interest. In short, this amounts to another form of corporate donations to political parties.