Japan likely to revise proposed budget due to wage-data errors

Labor ministry officials have admitted issuing monthly wage data without meeting sampling standards for years. (AFP)
Updated 11 January 2019

Japan likely to revise proposed budget due to wage-data errors

  • The data error has caused the ministry to underestimate payments made under Japan’s employment insurance program
  • Labor ministry officials admitted issuing monthly wage data without meeting sampling standards for years

TOKYO: Japan’s government is likely to revise its budget draft for the next fiscal year to pay for a shortfall of employment insurance benefits caused by errors in the country’s wage data, Finance Minister Taro Aso said on Friday.
The likely budget revision — a rare move — would follow the revelation that the labor ministry miscalculated workers’ average wages for years.
The data error has caused the ministry to underestimate payments made under Japan’s employment insurance program, which includes unemployment benefits, and another insurance covering compensation for workplace accidents.
Labor ministry officials admitted on Wednesday that they have issued monthly wage data without meeting sampling standards for years, hurting the credibility of a key gauge of the success of Prime Minister Shinzo Abe’s economic policies.
“Economic indicators provide the basis for decision on fiscal and economic policies and they must always be accurate,” Aso told reporters after a cabinet meeting. “It’s very regrettable that the wages data will be recompiled.”
Aso said the wage data flaw has caused the labor ministry to underestimate benefits for employment insurance and workpeople’s accident insurance. As a result, it needs to pay for additional benefits to make up for past shortfalls by adding necessary funds to the budget for the fiscal year to begin April 1.
“It’s highly likely that the budget draft will be revised,” Aso said, adding that the amount of extra spending has not been fixed yet.
In compiling the monthly data, which covers some 33,000 firms with five or more full-time employees, the labor ministry is supposed to collect samples from all the companies that employ 500 or more workers.
But it turned out that the data sampling failed to cover two-thirds of some 1,400 businesses in Tokyo for an unspecified period of time, ministry officials said. Domestic media reported the sampling error extends back for 15 years.
Chief Cabinet Secretary Yoshihide Suga said on Friday the government would examine all economic indicators.
The budget draft was compiled in December and was due to be sent to the parliament later this month for approval before April 1.
Abe’s cabinet last month approved a record ¥101.5 trillion ($937.12 billion) annual budget draft, featuring spending to offset the pain of a planned sales tax hike scheduled for October.

Cirque du Soleil walks a tightrope through pandemic

Updated 06 June 2020

Cirque du Soleil walks a tightrope through pandemic

  • Suitors wage backstage battle to rescue debt-stricken Canadian circus icon
  • Among the potential bidders is former fire eater Guy Laliberte, who fouded the acrobatic troupe in 1984

MONTREAL: Its shows canceled due to the COVID-19 pandemic, an already heavily indebted Cirque du Soleil’s fight for survival has invited an intense backstage battle to try to save the Canadian cultural icon.

High on a list of potential suitors is former fire eater Guy Laliberte, who founded the acrobatic troupe in 1984 but later sold it.

“Its revival will have to be done at the right price. And not at all costs,” said the 60-year-old, determined not to see his creation sold to private interests.

The billionaire clown said after “careful consideration,” he decided “with a great team” to pursue a bid, but offered no details.

Under his leadership, the Cirque had set up big tops in more than 300 cities around the world, delighting audiences with contemporary circus acts set to music but without the usual trappings of lions, elephants and bears.

Then the pandemic hit, forcing the company in March to cancel 44 shows worldwide, from Las Vegas to Tel Aviv, Moscow to Melbourne, and lay off 4,679 acrobats and technicians, or 95 percent of its workforce.

Hurtling toward bankruptcy, the global entertainment giant and pride of Canada commissioned a bank in early May to examine its options, including a possible sale.

Meanwhile, shareholders ponied up $50 million in bridge financing for its “short-term liquidity needs.”

Laliberte, the first clown to rocket to the International Space Station in 2009, ceded control of the Cirque for $1 billion in 2015.

It has since fallen into the hands of American investment firm TPG Capital (55 percent stake) and China’s Fosun (25 percent), which also owns Club Med and Thomas Cook travel. The Caisse de depot et placement du Quebec (CDPQ) retains the last 20 percent.

The institutional investor, which manages public pension plans and insurance programs in Quebec, bought Laliberte’s last remaining 10 percent stake in the business in February, just before the pandemic.

Since 2015, the Cirque has embarked on costly acquisitions and renovations of permanent performance halls, while its creative spirit waned, according to critics in the Quebec press.

Meanwhile, it piled on more than $1 billion in debt.

Fearing that the Cirque would be “sold to foreign interests,” the Quebec government recently offered it a conditional loan of $200 million to help relaunch its shows as restrictions on large gatherings start to be eased worldwide.

But the agreement in principle is conditional on the Cirque headquarters remaining in Montreal and the province being allowed to buy US and Chinese stakes in the company at an unspecified time in the future, “at market value” and with “probably a local partner,” said Quebec Minister of the Economy Pierre Fitzgibbon.

“The state does not want to operate the circus, but the circus is too important to Quebec (to leave it to foreigners),” he said.

In addition to Laliberte, other prospective buyers include Quebecor, the telecoms and media giant of tycoon Pierre Karl Peladeau, whose opening lowball bid was outright rejected.

“It is essentially the value and reputation of the brand” that has piqued interest in the company, says Michel Magnan, corporate governance chair at Concordia University in Montreal.

But “as long as there are restrictions on gatherings of people, the future is not very rosy” for the Cirque, he said.

Several challenges await, according to Magnan.

“There were a lot of people working in all of these shows. Where are they now? What are they doing? How are they doing? In what shape are they, what state of mind?” he said.

“The more time passes, the more this expertise risks evaporating.”

Small consolation: The Cirque resumed its performances on Wednesday in Hangzhou, China, five months after a coronavirus outbreak in the city.