Business / Economy

Wasteful tax spending in Japan second-lowest in 10 years: audit board

Kyodo

The Board of Audit said Friday that wasteful spending of tax money in fiscal 2017 was at the second-lowest level in a decade, while reporting that the state has been shouldering far more costs for the 2020 Tokyo Olympics than earlier projected.

According to the latest report on the use of the state budget, a total of ¥115.7 billion ($1.01 billion) in 374 cases was found to have been wastefully spent by government agencies and state-funded firms, or could have been better utilized in the spending system.

The cases include 292 violations of laws and regulations covering ¥7.5 billion in spending. By government office, the Defense Ministry received the greatest urging to address its spending methods.

Regarding costs related to the Olympic Games, the accounting watchdog concluded that the state has spent about ¥801.1 billion in the past five years, based on the auditing results it announced in October, and particularly after checking projects involving multiple government offices.

The sum largely exceeds the figures provided by the Tokyo 2020 Organizing Committee in December last year, which said the government was only expected to shoulder about ¥150 billion of the ¥1.35 trillion in estimated costs.

The board’s report also indicated that total spending for the Olympics may balloon to as much as ¥3 trillion, when adding the costs to be covered by the Tokyo Metropolitan Government and others.

Because some suspect the board is including the cost of projects less relevant to the event, the government conducted an independent study and announced on Oct. 30 that spending directly linked to the Olympics had reached about ¥172.5 billion, including funds for building the new national stadium.

But that’s expected to rise further, leaving it uncertain how much of the public’s money will eventually be spent on the event.

The board has continued to look into the heavy discount that Moritomo Gakuen, a school operator with ties to Prime Minister Shinzo Abe’s wife, Akie, received on a plot of state land. A fresh probe was launched after documentation on the deal was found to have been tampered with by Finance Ministry officials earlier in the year.

The board submitted its report to Abe on Friday. In the 10 years through fiscal 2017, the amount of wasteful spending of taxpayers’ money was the lowest in fiscal 2016, at about ¥87.4 billion.