The government may use all of its ¥270 billion in contingency funding from this current fiscal year to help mitigate the economic fallout from the new coronavirus outbreak in a second emergency package, Prime Minister Shinzo Abe said Tuesday.
Abe’s announcement came after he faced harsh criticism that his handling of the virus crisis had been “too little, too late,” with observers saying that it could even pose an existential threat to the longevity of his administration. Until today Abe had pledged to spend only ¥15.3 billion in total.
“We are hoping to make use of the fund as much as possible,” Abe told lawmakers during an Upper House budget committee debate, adding that the government was considering whether to use all of its reserve funds for fiscal 2019, which runs through the end of March.
But Abe’s new budget for coping with the virus crisis may still not be enough. Singapore, in contrast, announced a special budget totaling a staggering 6.4 billion Singapore dollars (¥496 billion) in mid-February to cope with the outbreak. The city state has a population of only 5.6 million, while that of Japan totals some 120 million.
Abe’s remarks on taking drastic economic actions are thought to have been aimed at minimizing growing anxiety in the nation, particularly among business leaders and working parents who were caught off guard by his abrupt request last week to close schools throughout the country.
During the same session, Abe assured lawmakers that the spending plan — which he said would be compiled by Tuesday next week — would include funding to subsidize working parents who must take time off to care for children affected by nationwide school closures. The health ministry has said companies that pay qualified workers up to ¥8,330 per day are eligible for the new government subsidies.
Small businesses that introduced telecommuting can also receive a subsidy covering half of their costs up to a ceiling of ¥1 million each, according to a new plan proposed by the health ministry. The government has urged businesses to take advantage of working remotely to reduce crowds, particularly during rush hour.
The planned second package will provide an additional monetary boost for medical infrastructure and financing for small and medium-sized businesses.
Meanwhile, opposition lawmakers have slammed Abe, arguing that his fiscal 2020 budget — now being deliberated in the Upper House — should be revised to include additional economic measures to ease the adverse impacts now anticipated in relation to the global COVID-19 crisis.
Abe panned the idea, however, saying the government-proposed budget for fiscal 2020 would be adequate to deal with various risks hampering the economy. The Lower House approved the budget last week.
The government will monitor the economic impact of the virus domestically and abroad, and act “without hesitation if necessary,” he said.
The Bank of Japan, the European Central Bank and the Federal Reserve have all pledged to take necessary actions to stabilize volatile markets.
Abe’s latest remarks seem to reflect his desire to project an image of strong leadership in a time of national unease. Critics have said the prime minister failed to demonstrate strong command skills and left much of the task of handling the crisis to the health minister during the early stages of the coronavirus outbreak across the nation.
Separate from the economic plan, Abe also underlined his determination to drive forward and pass legislation necessary to declare a state of emergency. He said during Monday’s session that the administration would amend a law implemented in 2013 that stipulates what measures can be taken in regards to an official response in the event of a novel influenza outbreak that could lead to a pandemic.
“We’re aware of the need for a framework that ensures necessities are properly distributed in the event of an exponential spread of the new virus in certain areas and when there’s fear of significant disruption in the future,” Abe said. “We’re going to advance specific measures to ensure a stable supply of those necessities in various ways, not just limited to legislation.”
Referring to shortages of toilet paper and similar paper products, the prime minister urged consumers not to hoard them and stressed that Japan had adequate stock of such goods. Unsubstantiated rumors have spread online recently that the materials used to make those toiletries are produced in China and could be diverted for the manufacture of facial masks.
Toilet paper and other paper goods are disappearing from shelves only because distribution has not been able to keep up with the pace of demand, Abe said.
While the opposition has said it will cooperate with Abe on COVID-19 countermeasures, that hasn’t stopped it from questioning his administration’s crisis management abilities.
Shigefumi Matsuzawa, a Nippon Ishin no Kai Upper House member, insisted Abe should prevent travelers from China and South Korea — two countries where there have been high numbers of reported infections — from entering the country. Japan’s government has already banned entry from two Chinese provinces and two areas in South Korea.
Abe said no such plan is under consideration, and pointed out that the number of tourists from those countries has already dropped significantly. Still, the government would take such actions if deemed necessary, he added.
Renho, a Constitutional Democratic Party of Japan Upper House member, pointed out Monday that three cabinet ministers had attended a political fundraising party with fellow lawmakers the previous week on Tuesday — the same day the government issued a basic policy asking event sponsors to consider whether holding such big events was necessary.
Separately on Tuesday, the Oita Prefectural Government reported the first coronavirus case in the prefecture, Hyogo announced its second case and two new cases were confirmed in the city of Sapporo.
The government is preparing to subsidize part of the costs associated with testing for the new virus through public health insurance from this week and make it possible to request screening directly from private institutions without first having to visit public health centers.
Health minister Katsunobu Kato said Tuesday the government would make the test free by having the government cover the full cost.
“We’re still at a crucial moment in terms of whether the infection will spread further or not,” Kato said.
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