The government and ruling bloc on Friday pressed forward with coronavirus measures, starting with the distribution of a ¥2 million cash handout for struggling small and midsize companies and proposing a rent-leniency program to help them as well.
The cash handout is aimed at companies whose income has been at least halved by the pandemic.
Smaller businesses will receive governmental support for the foreseeable future so they will not be forced to cease operations, according to the Ministry of Economy, Trade and Industry, which is in charge of the program.
The ministry has received over 400,000 applications for the money since it began accepting registrations on May 1.
Eligible applicants must have seen their monthly income drop by at least half from the previous year since January. Businesses founded this year are not subject to the payments.
The payments are expected to cover a wide range of sectors, from eateries, manufacturers and retailers to authors and actors.
Furthermore, those who are self-employed or work freelance will be able to receive up to ¥1 million in benefits.
The government will allow online applications to speed up the process.
The Liberal Democratic Party-Komeito ruling coalition on Friday also submitted a rent-relief plan for struggling businesses and self-employed businesspeople to Prime Minister Shinzo Abe, who promised to pursue speedy measures based on the proposal.
Under the program, the government would provide financial aid equal to two-thirds of the rent paid by the businesses for half a year.
Eligible for the relief will be small businesses and self-employed people whose monthly sales have halved from the previous year, or whose average sales dropped 30 percent in three months.
The government will shoulder two-thirds of the rent via zero-interest unsecured loans. The maximum aid per month will be ¥500,000 for small businesses and ¥250,000 for self-employed people.
LDP policy chief Fumio Kishida told a party meeting Thursday that the “hybrid” scheme involving loans and subsidies will help ease anxieties about rent. Nearly ¥2 trillion may be needed for the program, he said.
In the meantime, the government and LDP plan to begin talks on a second supplementary budget to deal with the fallout from the pandemic, ruling party sources said. But the size of the extra budget, as well as its timing, remains sketchy.
Finance Minister Taro Aso, who is widely seen as cautious about raising fiscal spending, suggested to reporters Friday that any new extra budget won’t be compiled until June.
Last week, the Diet enacted a ¥25.69 trillion extra budget for fiscal 2020 ending in March next year to finance an emergency package to support the economy and those hit hard by the virus.
On Thursday, pedestrian traffic in major areas was down by roughly 50 percent compared with just before the government declared a state of emergency for the pandemic last month.
A survey by NTT Docomo Inc. shows that as of 3 p.m. Thursday, the number of people at or around Terminal 2 of Tokyo International Airport at Haneda, and around Osaka’s Umeda district, had fallen by 51 percent from a month before. The survey was based on data collected via the mobile carrier’s base stations.
Major railways also reported drops. Hokkaido Railway Co. said traffic was down 50.9 percent at Sapporo Station and East Japan Railway Co. said traffic fell 49.3 percent at Yokohama Station. West Japan Railway Co. reported a drop of 46.8 percent at Kyoto Station.
The state of emergency declaration was issued on April 7 for seven prefectures — Tokyo, Chiba, Kanagawa, Saitama, Osaka, Hyogo and Fukuoka — and expanded to all 47 prefectures on April 16. It was originally slated to end on Wednesday, the final day of the Golden Week holiday period, but has been extended to the end of the month.
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