The central government is telling local and prefectural governments as well as public corporations to return ¥101.7 billion in unused disaster reconstruction funds.
The move comes after the Reconstruction Agency scrutinized how the money is being used amid growing criticism that it may have gone for other purposes, such as boosting employment outside the areas actually hit by the twin disasters of March 11, 2011.
It is extremely rare for the central government to demand the return of funds already allocated.
“We would like to ask for repayment while gaining the understanding of local governments,” post-disaster reconstruction minister Takumi Nemoto said.
Under the third extra budget for fiscal 2011 and the initial budget for fiscal 2012, the Finance Ministry and the Reconstruction Agency allocated about ¥1.2 trillion for reconstruction. Most of the designated projects are already under way or at least have been contracted.
The spending was intended to address the impact from the crisis at the Fukushima No. 1 nuclear plant, rebuild roads, ports and other infrastructure in Iwate, Miyagi and Fukushima prefectures, and help people living in the most damaged prefectures find employment.
The biggest single item for repayment involves ¥32.5 billion allocated to 45 prefectures for forest road construction. The idea behind the allocation was that demand for housing would soar in the wake of the disasters, according to the Agriculture, Forestry and Fisheries Ministry, which handles this program.
In May, media reports revealed that some of the money designated for municipalities and public corporations was being diverted to projects that had little to do with reconstructing tsunami-ravaged regions, such as forest maintenance.
The Reconstruction Agency was initially reluctant to urge local and prefectural governments to surrender the money out of fear of fostering resentment. But the Finance Ministry took a harder line toward investigating how the money was being used, stressing that it mainly came from emergency tax hikes imposed on the nation’s residents.
A stream of revelations have since surfaced pointing to other examples of misuse, including organizing events outside the afflicted areas.
Amid the cascading disclosures, the Reconstruction Agency eventually dovetailed with the Finance Ministry, concerned any more media criticism would threaten to fuel public disappointment with reconstruction projects as a whole.
Rebuilding the disaster-hit areas has been played by the Abe administration as an urgent task.
In a news conference Tuesday, Chief Cabinet Secretary Yoshihide Suga voiced regret over the misuse of money, reaffirming the administration’s continued commitment to “playing hardball with” local governments.
Takenori Noda, mayor of Kamaishi, Iwate Prefecture, welcomed the move.
“I have been long frustrated by the government’s lack of sincerity in caring about our plight. But its brave decision this time has raised my spirits a bit,” he said.
Suga meanwhile claimed the misuse originated in the budget compiled by the Democratic Party of Japan before it was knocked out of power by the Liberal Democratic Party in December.
“The LDP-New Komeito government is drafting a budget in a way that there will be no recurrence of such misuse,” he said.
Suga no doubt was trying to remind voters of the DPJ’s perceived mistakes ahead of the Upper House election this month.