As part of an economic stimulus package to be compiled in April, the government is considering a plan to provide cash to households facing a loss of income due to the coronavirus pandemic, according to sources with knowledge of the matter.
The size of the package is likely to balloon with some ruling bloc lawmakers calling for more measures following the decision to postpone the 2020 Tokyo Olympics, which is expected to further damage the tourism and retail industries, the sources said.
The package is projected to exceed ¥30 trillion. Combined with the ¥26 trillion stimulus package drawn up late last year in the wake of the Oct. 1 consumption tax hike, the steps hammered out this time could outpace the ¥56.8 trillion in measures compiled to deal with the 2008 global financial crisis.
Though fiscal 2020 won't begin until April 1, the government is slated to compile a fiscal 2020 supplementary budget to cover the cost of the stimulus.
As an increasing number of businesses are being forced by the coronavirus fallout to suspend operations, "enough cash benefits should be provided to people really in need," a government official said, suggesting the cash program will not cover all households. The government plans to start offering the cash in May at the earliest.
As for consumers, the relief package is expected to include cash payments to households whose income declined sharply for reasons related to the COVID-19 pandemic, other sources said. The government is aiming to make the payments in May. How much they would receive has not been decided, but the amounts could be around ¥200,000 per household, they said.
With the Tokyo Games on hold, it is now all but certain that the government will miss its tourism target of 40 million for the year.
Some people have even started calling for the government to draw up a second supplementary budget for 2020 to support the hotel and transportation industries, which are expected to take heavy losses from the Olympic delay.
The government and the Liberal Democratic Party-Komeito ruling coalition are considering issuing shopping vouchers for tourism and events in a bid to ease the economic impact of the postponing the games.
With the shopping vouchers and other measures, they aim to stem the drop in inbound tourism and revive the domestic tourism industry after the virus crisis is brought under control, sources said.
The government and ruling parties are also considering expanding a one-year grace period for corporate tax payments by small and midsize companies affected by the fallout from the pandemic, sources close to the matter said Wednesday.
The planned measure to expand the already available grace system will be part of an economic package to be finalized next month as they aim to mitigate the negative effects of the contagion.
Currently, a company requesting a one-year grace period to stay afloat needs collateral matching the amount of tax owed and is required to pay overdue tax in principle.