Infrastructure ministry officials have instructed prefectural government workers to rewrite construction contract figures, according to a document obtained by The Asahi Shimbun. Yosuke Fukudome Infrastructure Ministry bureaucrats instructed local government officials to inflate construction contract figures for the past eight years, an egregious and possibly illegal act that could distorted key economic statistics, according to an Asahi Shimbun investigation.
Ministry officials admitted that such instructions were given, and that the contract figures were inaccurate.
The construction contract figures are defined as fundamental statistics and are used to calculate other important data, such as gross domestic product.
In fiscal 2020, the total construction contracts reached 79.598 trillion yen $700 billion, according to the Ministry of Land, Infrastructure, Transport and Tourism.
The ministry calculates the figure based on a sample of about 12,000 construction companies around the nation chosen for a one-year period from the 480,000 or so construction companies in total.
The selected companies are obligated to submit monthly reports about the monetary figures of the contracts they received for the month. The aggregated figures are used to estimate the total amount of construction contracts.
Infrastructure ministry officials handed out instructions to prefectural government workers who actually collected the monthly reports on what to do if a company was late in submitting its figures, according to the Asahi Shimbun.
Prefectural government workers were told to use the average figure of all companies that submitted reports instead of listing zero for the month when no report was submitted.
When the company submitted its report, the figure for the month when it failed to provide the number was included in the total figure for the latest reporting month.
Since the average figure was already used as the company's amount for the unreported month, the result was a double-counting of the amount of contracts received by the company.
About 10,000 reports were rewritten every year, according to several infrastructure ministry sources.
The practice was stopped in April of this year because it did not appear to be appropriate, according to one ministry source. It's an understatement that inappropriate is an understatement.
The penalties for falsification of statistics during the collection stage are included in the Statistics Law.
Hideaki Hirata, professor of macroeconomics at Hosei University who previously worked in statistic compilation at the Bank of Japan, called the revelation an egregious and unheard-of example.
No one will trust government statistics, Hirata said. I am stunned by the fact that the ministry took the initiative for the falsifications.
The ministry section in charge of the construction industry statistics admitted to giving instructions to rewrite the data, which resulted in the total figures being inflated.
Ministry officials said they had no idea why or when the practice started because it went so far back that it was difficult to trace.
In late 2018, it was revealed that faulty methods were used to compile the Monthly Labor Survey reports that were the basis for determining unemployment benefits.
The Tokyo metropolitan government has used a sample of companies to compile the data, rather than survey all companies with at least 500 employees, as it was supposed to do.
After that revelation, all central government ministries were told to review their methods of collecting fundamental statistics.
The infrastructure ministry did not acknowledge any questionable methods being used, although the rewriting of the construction contract figures was going on at the time.
The ministry said on its website that the statistics in question were intended to obtain basic records for various economic and social measures.
The statistics were used to compile important indexes, such as the Monthly Economic Report released by the Cabinet Office.