Oops! Japanese govt. says sorry for $0.5bn in unpaid benefits

FILE PHOTO: A Japan Yen note. ©Reuters / Thomas White / Free

The Japanese government is red-faced after discovering that, for over a decade, it has not been paying proper benefits because its labor ministry cut corners while collecting job data. Its 2019 budget could now be amended.

At a news conference on Friday, Japan’s Labor Minister Takumi Nemoto offered a humble apology for the use of improper polling methods, which resulted in a failure to pay some 53.7 billion yen (about $495.7 million) in benefits between 2004 and 2017.

“It is extremely regrettable that this problem occurred in (ministry) statistics, which form the foundation of policymaking and academic research,” he told reporters at a post-Cabinet meeting news conference. “I apologize from the bottom of my heart for causing people trouble.”

The wage statistics, which are used to calculate things like unemployment benefits and accident compensations, is supposed to cover all Japanese businesses with at least 500 employees. But apparently only a third of such firms were polled in Tokyo. The discrepancy was first noticed in December last year.

The minister said an internal investigation is underway to establish how this happened, but denied a suggestion by the press that the cause was a systematic cover-up by the government.

“At this point, I don’t believe there was any organizational attempt to cover up the problem,” the minister said as he promised to take disciplinary action against employees, who allowed the problem to arise.

The ministry pledged it will pay due benefits to people affected by the error, the cost of which may require amending the 2019 budget, Finance Minister Taro Aso told reporters.

“We will move ahead with our inquiries with an eye to adding the required amount to the fiscal 2019 budget,” he said. The draft budget was approved in December.

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