Japan Defends Coupon Distribution Despite Criticism Over Cost

(Bloomberg) -- Japan defended its plans to use vouchers in a program providing Covid relief to families with children amid criticism that the coupons, which will add nearly $1 billion in costs, are an unnecessary expenditure.

Finance Minister Shunichi Suzuki said Friday the costs for vouchers weren’t too high compared with similar projects in the past and the coupons would be an effective economic stimulus. He told a briefing that by limiting the use of the coupons to childcare and setting an expiration date, “we can provide benefits efficiently in terms of stimulating consumption without waste.”

Suzuki added the vouchers would have a ripple effect on regional economies and help in creating services for the care of children. 

The voucher program would add 97 billion yen ($856 million) in costs over just handing out a lump sum in cash, Chief Cabinet Secretary Hirokazu Matsuno said Monday.

Prime Minister Fumio Kishida’s government last month announced plans to provide 100,000 yen handouts for each child 18 and younger that would go to the bulk of households. Half of the aid is in cash distributed at an early date and half in vouchers set to be distributed next spring. 

Opposition politicians have said the money for the voucher program could be better spent to help struggling families. Osaka Governor Hirofumi Yoshimura, a senior member of the right-leaning Ishin opposition party, said on Twitter Wednesday taxpayers shouldn’t be stuck with the extra costs for the coupons.

The vouchers are to be used for education and childcare purposes and the government sees them as providing a more effective stimulus than cash, which could be put into savings accounts rather than into economic consumption. 

Japan’s Kishida Eyes Record Fiscal Firepower to Aid Recovery

The relief is part of Kishida’s 56 trillion yen fiscal support package of spending, investment and loans to help the economy recovery from the pandemic.

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