The government and ruling coalition have begun to consider compiling a third batch of emergency measures to cope with the spread of the new coronavirus in order to cushion the impact of the outbreak on the country’s economy.
The move comes just a few days after the second such emergency package was announced. The government apparently now believes that the package is insufficient, amid concerns over the slowdown of the world economy.
The government and the ruling coalition will examine the merits of compiling a supplementary budget for fiscal 2020, according to sources with knowledge of the matter. The regular budget for the year starting next month has yet to be enacted.
In another move related to the outbreak, the Lower House approved a bill to give the government emergency powers to deal with the crisis. The two largest opposition parties supported the bill. The Upper House is expected to enact it as early as Friday.
“We must watch carefully the effects of the new virus on the economy,” Prime Minister Shinzo Abe said at a plenary session of the Upper House on Wednesday. “We will do all we can in terms of economic and fiscal policy management.”
A plan to provide ¥30,000 each to households with children is being discussed as part of the third package, while the scale of the potential supplementary budget is expected to be between ¥10 trillion and ¥20 trillion, according to the sources.
The government and ruling bloc, led by Abe’s Liberal Democratic Party, have not officially started work on the supplementary budget due to concerns that such moves may affect ongoing Diet deliberations on the fiscal 2020 regular budget. They hope to begin preparations for the supplementary budget soon, after the Diet passes the regular budget — possibly later this month.
The LDP and its Komeito ally held a regular breakfast meeting among their secretaries-general and Diet affairs chiefs in Tokyo on Wednesday.
The meeting was also attended by policy chiefs from the two parties. In a rare move, Chief Cabinet Secretary Yoshihide Suga and Assistant Chief Cabinet Secretary Kazuyuki Furuya, who is responsible for domestic political affairs, were also invited to the meeting to represent the government.
The participants agreed to closely monitor the economic situation and take additional measures if necessary.
Also on Wednesday, the LDP held a meeting of its economic growth strategy task force, conducting hearings with representatives of the agriculture, forestry and fishery industries about current conditions. Many of them described very difficult situations.
“We need to prepare drastic economic measures,” LDP policy chief Fumio Kishida said at a meeting later with heads of the party’s divisions, instructing them to draw up specific proposals by the end of the month.
The government’s second batch of emergency measures against the new virus included assistance for workers using leave to take care of their children due to government-requested school closures, expanded virus testing and the creation of a special loan program for small firms.
The package included some ¥1.6 trillion in financial measures through state-backed lenders and the use of ¥430 billion in government funds.
But a source close to the prime minister said measures that comprise the package will only be carried out within the confines of the current budget.
A group of LDP lawmakers has submitted to economic revitalization minister Yasutoshi Nishimura a set of proposals, including the compilation of a supplementary budget of around ¥30 trillion and a freeze on the consumption tax.
“We must take action without being bound by precedent,” Nishimura told them.