As sales at restaurants and other businesses have been slow to recover amid the lingering effects of the pandemic, the burden of their rent payments is becoming larger. It is important to shore up the economy with prompt rescue measures.
The Economy, Trade and Industry Ministry will start accepting applications for "rent support benefits" from Tuesday.
The benefits will be up to two-thirds of rent. The ceiling will be 6 million yen in total for small and midsize operators and 3 million yen for one-person businesses. A sharp drop in sales is a condition for the benefits.
Businesses like small and midsize restaurants and retail stores are often housed in rental properties. With income falling due to the spread of the novel coronavirus, they are struggling to pay their rent, a fixed cost.
It is understandable that the government intended to launch the benefits to help ease the burden on their rent.
Even after the resumption of economic activities, restaurants and other businesses are forced to conduct operations in ways that avoid crowded situations. Therefore, sales have not returned to normal. In Tokyo, meanwhile, the number of people newly infected with the virus has exceeded 200 on some days, raising fears of a second wave of virus infections.
Many small and midsize establishments are surviving their current plight with virtually interest-free and no-collateral loans provided by government-affiliated financial institutions, but an increasing number of such businesses have been forced to close or go bankrupt. Rent support is becoming more important.
It took more than a month to begin accepting applications for the rent support benefits after the second supplementary budget, which includes the rent subsidies, was enacted. This was because the government was slow to prepare and improve the system and adjust the content of the applications.
In addition to documents proving a decline in sales, applicants for the rent support benefits need to submit a copy of a lease contract and a bankbook with payment records, among other things.
It is worrisome that it is taking even longer to actually receive the rent support benefits, after the application procedures, than it did for the benefits intended to help small and midsize businesses sustain their operations. No concrete date has been set for when the payments of the rent support benefits will be made.
As the applications are accepted only online, consideration needs to be given to business operators who are not familiar with digital procedures. It is hoped that the government will cooperate with local chambers of commerce and industry and other entities to deal carefully with the rent support benefits.
The rent support benefits should be paid as soon as possible by strengthening the system, such as through the inclusion of contractors to whom the government entrusts the provision of the benefits.
It is essential to ensure transparency in the implementation of such measures. In the benefits provided to small and midsize businesses to help them sustain their operations, the high cost of contracting to the private sector and the process of selecting contractors were criticized. For the rent support benefits, it is said that payments to contractors may come to about 76 billion yen.
The government plans to eventually spend only what it deems appropriate after examining labor costs and details of the work, among other factors. Cost reductions must be made thoroughly.
It is also important to take measures to prevent business operators from receiving the benefits illicitly. The government plans to make public the names of firms found to be involved in illicit receipt of the benefits, and will require them to repay the money plus a 20% penalty. In egregious cases, it will file criminal complaints. Strict applications of rules will be effective. Hopefully, the rules will be made widely known to strengthen the surveillance.
-- The original Japanese article appeared in The Yomiuri Shimbun on July 14, 2020.
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