A Tokyo hotel president is worried about the financial outlook of his hotel, which was closed for nearly two months because of the coronavirus pandemic.
"Our profits during the closure was virtually null. We need cash as soon as possible," said Fumio Kajikawa, 71, who runs Family Resort Fifty's for Maihama in Edogawa Ward, Tokyo.
He applied for the government cash handout for small- to mid-sized companies affected by the pandemic on May 1, the first day that applications were able to be filed. After waiting for nearly a month, the money was finally deposited into his account at the end of May. However, during the closure, the cost of rent and payroll weighed heavily on his shoulders. The hotel was closed on April 9 and resumed operation on June 1, but the outlook is bleak.
Receiving the cash handout was supposed to be pretty simple. Small- to mid-size business owners could apply for it online and the money would be deposited into their bank account two weeks later -- that was the government's plan.
However, as of May 29, only 800,000 cases, or 60%, have received the money totaling more than 1 trillion yen, out of the 1.4 million applications that have been filed. Both businesses and the government were not used to handling such procedures online, which led them to take longer time, especially regarding attaching PDF files or photographed documents, and examining them.
A 53-year-old businessman in Yokohama, who runs a company handling props and sets for events and theatrical performances, has not received the cash handout yet.
"If I don't get the payment, my savings will run out in July," he said, looking concerned.
According to Teikoku Databank, Ltd., more than 200 companies went bankrupt because of the pandemic, and the employment situation is also rapidly deteriorating. The phrase "the worst recession since the end of the war" is starting to sound realistic.
The government has allocated two supplementary budgets this fiscal year, whose scale combined totals 234 trillion yen to cope with the situation, but the required aid isn't getting where it needs to go fast enough. What has become apparent is the government's inefficiency and lack of digitalization.
Most people have also yet to receive the government's cash handout of 100,000 yen for individuals. Forty-three municipal governments have even stopped the online application process citing problems occurring one after another using the My Number identification number and said it is quicker to send applications via mail. In many other countries, including the United States, individual identification numbers are linked with their bank accounts, making it possible to deposit money quickly. Japan is well behind in making the most of the My Number system.
If the second wave of the infection spreads, the number of corporate bankruptcies and unemployment will surge, requiring more financial support.
"Government procedures were not designed with emergency situations in mind. Making many support measures is meaningless if it doesn't get to the people who need it most," said Takahide Kiuchi, an executive economist of the Nomura Research Institute.
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