National / Politics

Cabinet to keep Diet bills to a minimum with apparent eye on July Upper House election

by Sakura Murakami

Staff Writer

Facing a critical Upper House election this summer, Prime Minister Shinzo Abe appears to be laying the groundwork for a controversy-free five-month Diet session, which starts Monday.

Abe’s Cabinet now plans to submit only 58 government-sponsored bills to the session, which is reportedly the second-least number for any ordinary Diet session since 1945. The bills do not include any major controversial measures that would spark heated political battles between the ruling and opposition lawmakers.

However, the prime minister’s strategy has already hit a snag as major turmoil appears to be in the pipeline.

Massive scandals involving numerous errors in 22 of the government’s 56 basic statistics reports — including those involving key wage data — emerged earlier this month, which is expected to continue plaguing Abe’s administration as the opposition parties prepare to grill him and other key officials over the matter.

“I deeply apologize to the public for causing trouble like this,” said Takumi Nemoto, the health, labor and welfare minister, during a special out-of-session meeting at the Lower House on Thursday. “It is most unfortunate that such a mishap should occur for government statistics that help in making informed decisions on public policy, academic research, and business matters — which require the utmost accuracy,” he added.

When surveying nominal wages across the nation every month, the Health, Labor and Welfare Ministry is obliged by rules to check wages and salaries at all businesses with 500 employees or more.

But after facing questions from economists, the ministry admitted it had only surveyed a third of such firms in Tokyo from 2004 through 2017, a possible violation of the statistics law. This resulted in the average wage appearing lower than the actual level because major firms in Tokyo usually pay higher salaries than those in other regions.

The impact was huge. As a result, more than ¥50 billion in job-related public insurance benefits for about 20,000 people were not paid because they are decided based on the results of the monthly wage survey.

This also forced the Cabinet to revise its fiscal 2019 budget draft on Jan. 18, a humiliating event for the Liberal Democratic Party-led government since it has rarely revised a budget draft — even during budget committee sessions.

“This problem has stemmed from a lack of governance, caused primarily by the lack of statistical expertise among higher-ranking officials within the ministry,” said Nobuo Iizuka, a professor specializing in economics at Kanagawa University.

He added there seemed to be no structure in place for senior officials to check the reliability of the research, referring to the findings of a third-party committee that concluded on Tuesday that the data-crunching was left to more junior members of the ministry.

The data scandal has also raised grave questions over the credibility of one of the key statistics that help gauge the success of Abenomics, the prime minister’s economic policies.

In January 2018, the labor ministry secretly started correcting wage data that had been based on the sampling survey.

As a result, the wage data — which had been kept lower than actual levels — started recording sudden surges last year. For example in June, it registered a 3.3 percent jump from the same month the previous year, the highest surge in more than 21 years.

The Abe administration was able to use the faulty data — knowingly or unknowingly — to make the claim that Abenomics was working.

The prime minister had pledged to bust deflation, with higher overall wages seen as a prerequisite to spark sustainable inflation.

“This is fake Abenomics,” said Kazunori Yamanoi of the Democratic Party for the People, the second-largest opposition force, in reference to the wage increases logged in the 2018 surveys. He made the comment while speaking at a special Lower House session on Thursday.

Meanwhile, the report released by the third-party committee concluded it could not find any evidence that government officials deliberately turned a blind eye to the data errors and instead laid blame on mismanagement and an environment where the importance of rigorous statistical analysis was taken lightly.

However, opposition lawmakers have criticized the probe by the so-called independent panel, saying it was a de facto internal investigation because labor ministry officials carried out the interviews with government employees involved in the matter for the members of the committee.

The wage scandal has also prompted all other major ministries to check their own statistical data collection and methodologies in gathering such information.

The internal affairs ministry announced that it has found a total of 31 cases where data had been mishandled in the 56 main government statistics reports. Those include surveys on wide-ranging issues, from the state of commerce and dairy products to teachers and education.

On Friday, the Cabinet Office announced it has revised upward its estimates of the total remuneration Japan’s employees received for fiscal 2017 by ¥700 billion, to ¥276.3 trillion.

The Constitutional Democratic Party of Japan, the largest opposition force, has made clear it will scrutinize the debacle during the Diet session.

“How can the government maintain the public trust in a situation like this?” said Michihiro Ishibashi, an Upper House CDP member, during a party meeting on Tuesday. “We want (the government) to provide an explanation that will satisfy the people.”