As the funds allocated in the government's special account budget to compensate victims of automobile accidents dwindle, victims have established an organization to demand that funds transferred to the general account budget citing "the country's financial straits" years ago be returned to the government's special accounts budget, where they originated.
Some 1.12 trillion yen in management gains of automobile liability insurance -- which had been allocated in the government's special accounts budget as a source of funds to compensate victims of automobile accidents -- was transferred to the general account budget over 20 years ago, and roughly 610 billion yen has yet to be returned to the special account. If the situation continues, there is a possibility that the funds left in the special account will disappear in a decade or so.
The new group, "Jidosha songai baisho hosho seido o kangaeru kai" (Group that thinks about the automobile liability insurance system), was established last month by families of automobile accident victims and experts, and is headed by Yasuo Fukuda, Dean of the College of Risk Management at Nihon University.
The Ministry of Land, Infrastructure, Transport and Tourism (MLIT) -- formerly the Ministry of Transport -- which oversees this special account budget, has exchanged memorandums with the Ministry of Finance under the ministers' names four times in the past stipulating a deadline for the return of the money to the special account, but the Finance Ministry has failed to hold up its end of the deal, extending the deadline multiple times. The fourth deadline is set as the 2018 fiscal year, and the group of victims' families and experts will demand that the Finance Ministry return the funds ahead of the end of this year, when budgetary planning will be under way for the 2018 fiscal year.
This issue can be traced back to the 1994 fiscal year. Facing a financial crunch, the then Ministry of Finance zoomed in on the special account budget of the then Ministry of Transport, and transferred management gains of approximately 1.12 trillion yen, which came from a government reinsurance system in which the government managed 60 percent of insurance premiums collected by insurance companies in the 1994 and 1995 fiscal years, to the general account budget.
In the first memorandum exchanged between the Finance and Transport ministries, the money, in its entirety, was to be returned to the Ministry of Transport by fiscal 2000. But aside from 640 billion yen (of the principal), which was given back by fiscal 2003, the money remains unreturned. This means that a highly unusual situation has continued, in which a total of 610 billion yen in principal and interest has yet to be returned to the special account budget.
When the government reinsurance system was abolished in March 2002, some 11/20 of approximately 2 trillion yen in management gains (or approx. 1.1 trillion yen) was used to lower insurance premiums, while 9/20 (approx. 870 billion, including the remainder of the principal and interest that was transferred to the general account) was earmarked for the establishment of a new foundation for victims of automobile accidents.
The foundation was meant to be managed by the MLIT, with interest revenue resulting from managing the approximately 870 billion yen set to be allocated to care for victims, such as funding hospitals operated by the National Agency for Automobile Safety and Victims' Aid (NASVA) that specialize in treating patients with serious permanent damage or complications from automobile accidents.
However, because there is money yet to be transferred back from the general account to the special account, the foundation only has 260 billion yen left at its disposal. Moreover, unexpected low interest rates have been digging deep into the foundation's money; the amount is expected to drop to 178.6 billion yen at the end of fiscal 2017. Since some 13 billion yen is necessary annually for measures to aid victims, money at the foundation is highly likely to dry up in a dozen or so years.
A Finance Ministry official only went so far as to say, "We will make a decision after checking the fiscal circumstances of the general account budget against the balance of the special account, and conducting talks with the MLIT."
According to the new "Jidosha songai baisho hosho seido o kangaeru kai" organization, deaths from vehicular accidents have gone down in recent years due to progress in medical treatment, but there are about 1,800 people every year who are left with serious disabilities from automobile accidents. "We are hoping for improved measures to ensure victims' recovery," a representative said.
Meanwhile, the chairman of the Japan Automobile Federation (JAF), Takayoshi Yashiro stated, "Diverting management gains for other purposes is unacceptable. I worry that (the memorandums exchanged between the ministers) will end up being empty promises."