The government's emergency package to cushion the economy from impacts of the COVID-19 pandemic has reached ¥117.1 trillion after the government approved a revised supplementary budget for fiscal 2020 on Monday.
The increase from the initial package worth ¥108.2 trillion comes after a sudden policy shift to provide universal cash handouts of ¥100,000 per every individual in Japan, instead of the original plan to give ¥300,000 to each household whose income had fallen sharply due to the virus outbreak.
The revised supplementary budget for fiscal 2020 is worth about ¥25.69 trillion.
It is rare for the government to rework a budget bill that has already been adopted. The size of the extra budget as of April 7 was ¥16.8 trillion.
The rest of the emergency package does not require direct fiscal action by the government since it includes items such as expanded lending programs and moratoriums on tax payments for struggling businesses.
Prime Minister Shinzo Abe announced at a news conference Friday that he would be replacing the original household aid plan with the across-the-board ¥100,000 handouts. The switch came after pressure from Komeito, the coalition partner of his ruling Liberal Democratic Party.
Delivering cash to some 126 million people will require an additional ¥8.88 trillion, prompting the government to issue deficit-covering bonds worth ¥23 trillion to finance the measure, among other policies included in the extra budget.
The extra budget is expected to be submitted to the Diet around April 27, with its enactment likely on May 1 — one week later than the government had originally scheduled.
The cash handouts should start to be issued by the end of May. People will need to apply for the money via mail or online, officials said.
Among other policies in the emergency package are subsidies of up to ¥2 million for sole proprietors, including freelancers, and medium-size companies whose revenue has dropped significantly due to the pandemic.
The central government will also extend special subsidies worth ¥1 trillion to local governments so they can provide financial aid to companies that comply with their requests to suspend operations under the nationwide state of emergency set to run through May 6.
About ¥13.9 billion will be used to triple the national stockpile of flu drug Avigan to ensure there is enough to treat 2 million people.
The drug, developed by a group firm of Fujifilm Holdings Corp., is being tested as a treatment for COVID-19, after studies in China suggested it was effective in treating patients with the respiratory disease caused by the novel coronavirus.
The latest stimulus far exceeds the ¥56.8 trillion emergency package compiled in April 2009 to counter the effects of the global financial crisis that began the previous year. It follows the ¥26 trillion stimulus approved last December to soften the impact of the October rise in the consumption tax.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.
PHOTO GALLERY (CLICK TO ENLARGE)
Your news needs your support
Since the early stages of the COVID-19 crisis, The Japan Times has been providing free access to crucial news on the impact of the novel coronavirus as well as practical information about how to cope with the pandemic. Please consider subscribing today so we can continue offering you up-to-date, in-depth news about Japan.