Japan Press Weekly

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2012 October 17 - 23 [GREAT EAST JAPAN DISASTER]

80% of disaster-recovery fund given to major firms

Large companies have received 80% of the nearly 300 billion yen subsidy to the private sector for post disaster recovery. This was revealed by Japanese Communist Party lawmaker Inoue Satoshi on October 18 at a House of Councilors audit committee meeting.

The subsidy is aimed at preventing the impact of the 2011 Great East Japan Disaster from hollowing out industries as well as “maintaining and creating employment,” according to the Ministry of Economy, Trade and Industry.

Inoue found out that small- and medium-sized companies have received only 64.5 billion yen or 21% of the 295 billion yen subsidy. The remaining 80%, or 235.5 billion yen, has been given to major corporations, including ones with huge amounts of internal reserves.

For instance, Toyota Corporation, while having more than 14 trillion yen in internal reserves, received the subsidy for eco-friendly car production in Aichi Prefecture, located far from the disaster-stricken region. Maintaining more than 4 trillion yen in internal reserves, Canon has used the subsidy in Kanagawa and Oita prefectures, which are also far from the region.

Although the METI estimates that the subsidy will help create 270,000 new jobs, the money has also been given to major firms that are promoting massive restructuring.

Office equipment maker Ricoh has used the subsidy to install production equipment at its subsidiary’s toner factory in Miyagi Prefecture. However, the operation of the new equipment starting in June next year will create only 20 new jobs. Meanwhile, Ricoh announced in May last year that it would cut 10,000 jobs in its group.

The subsidy has also been given to other restructuring promoters such as Panasonic (-40,000 jobs), Sharp (-10,000 jobs), and Renesas Electronics (-14,000 jobs).

Ritsumeikan University Professor Shiozaki Yoshimitsu found in his research that one-third of the tax money used for recovery from the 1995 Great Hanshin-Awaji Earthquake did not have any direct connection with reconstruction work.

“It is illogical for well-financed large corporations to receive reconstruction funding that the government created by increasing tax burdens on citizens,” said Shiozaki, adding that the budget should be used instead to help disaster victims find jobs and reconstruct their houses.