Suspicions have arisen that two subsidiaries of major travel agency H.I.S. Co. abused the Go To Travel campaign by tapping government subsidies for nonexistent stays, and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) has launched a probe. If the suspicions prove true, they are acts of fraud.
The Go To Travel campaign is designed to spur demand in the travel sector by having travel agencies provide government subsidy-funded discounts for users of accommodations and other businesses.
Due to the coronavirus pandemic, the two subsidiaries didn't get bookings for all the hotel rooms they had secured. It is possible they accordingly falsified over 18,000 nights' worth of accommodation in their applications for government subsidies, covering their losses with the funds they received.
H.I.S. has begun questioning the people involved, but it has not held a news conference or provided any details relating to the suspicions. It should fulfill its responsibility to explain the matter.
It is odd that two separate subsidiaries would use the same ploy. The company managing the hotel rooms is run by a former H.I.S. president. Sufficient inspections are needed to determine if this was an organizational act.
Moves to jump-start the travel business from the New Year are being considered. But until suspicions are resolved, it is probably appropriate to exclude the H.I.S. group from subsidy eligibility.
The government's responsibility also comes into question. MLIT has jurisdiction over the Go To campaign, but the work is outsourced to the "tourism industry joint recommendation body," a secretariat formed by the tourism industry. Travel agencies and other firms dispatch workers there, and they screen applications and handle subsidy payments. It is basically an in-house checking system.
The documentation filed with subsidy applications lists the names of program users and their accommodation itineraries, but there is no need to provide supporting ledgers. Can documents be screened fairly under these conditions, and was it not possible to catch illicit applications at the time they were filed? Doubts linger over the secretariat's work.
The Board of Audit of Japan noted in its fiscal 2020 audit report that the government was unable to sufficiently oversee the execution of the Go To campaign budget. If the screening system remains problematic, then even if the campaign is restarted, the same thing could happen. The top priority is identifying the problems and amending the system.
The government has invested a huge amount of funds in measures to offset the impact of the coronavirus. However, there has been a stream of fraud related to subsidies for small and medium-sized businesses. The government cannot fulfill its managerial responsibility by leaving the entire subsidy campaign in the hands of a subcontractor.