June 27, 2020

Cozy ties between the government and the largest Japanese advertisement agency Dentsu have become an issue in relation to the COVID-19 subsidy for small businesses in Japan. Dentsu, which is often commissioned to handle government publicity, is playing its part in supporting the Abe government.

Government publicity is aimed at informing the public of a proposed policy and its necessity by such means as TV and radio commercials, newspaper and magazine ads, and the Internet.

Since the inauguration of the second Abe government in 2012, government PR expenses have been increasing. When the Democratic Party (now disbanded) was in power, the PR cost was around 4.1 billion yen. In contrast, the Abe government in fiscal 2020 spent 8.5 billion yen or more than double the money previously spent on advertising and publicity.

The government's main advertisement agency is Dentsu. The government paid Dentsu about 1.77 billion yen in fiscal 2013 in PR expenses which doubled to 3.56 billion yen in two years. In fiscal 2019, the cost increased to more than four billion yen.

According to a government document published in 2016, the ratio of PR expenses paid to Dentsu in relation to the total government PR cost has been around 50% since fiscal 2013.

The government, when increasing the consumption tax rate to 8% in 2014, placed copies of a pamphlet at all post offices in Japan to gain public acceptance of an 8% tax rate. In order to fend off public criticism about the higher consumption tax rate, the government spent a total of 1.23 billion yen. The ad agency on this occasion was Destu.

When the government further increased the tax rate to 10% in 2019, the agency that handled the PR activity was again Detsu. The Ministry of Economy, Trade, and Industry in cooperation with the Small and Medium Enterprise Agency poured 1.5 billion yen in total into a full-page ad in major national and local newspapers calling on business owners to introduce a cash register which is compatible to the new tax rate so that they can apply for a government grant to purchase the new register system.

Past related article:
> Government should be accountable for corruption allegation regarding coronavirus-related subsidy program [June 8, 2020]