With the government slated to compile a third supplementary budget for fiscal 2020 to fund additional stimulus measures, some in the ruling parties are calling for fiscal spending of as much as ¥30 trillion, while others are expecting ¥10 trillion to ¥15 trillion.
Prime Minister Yoshihide Suga is expected to issue instructions for drawing up a third extra budget as early as Tuesday, with a view toward approving it at a Cabinet meeting in December.
The envisioned budget would likely extend the government’s Go To Travel subsidy campaign, which is currently set to be terminated at the end of January.
Ongoing subsidies for companies that avoid staffing cuts amid the coronavirus epidemic are also expected to be extended beyond January.
The budget may also include funds for promoting the development of vaccines against COVID-19 and for accelerating digitalization efforts in the public and private sectors.
The government and the ruling parties seem cautious about the potential for additional cash handouts to people.
At a news conference on Friday, Hiroshige Seko, Liberal Democratic Party secretary-general in the House of Councilors, indicated that fiscal spending of some ¥30 trillion is desirable.
“We shouldn’t hesitate to spend money right now,” Seko said. “We should focus on protecting the foundations of our economy.”
In fiscal 2020, which started in April, the government’s second supplementary budget totaled a record ¥160.3 trillion. Meanwhile, annual tax revenues are now seen falling short of the initial estimate of ¥63.5 trillion.
For a third extra budget, the government plans to issue additional government bonds, as well as use reserves for measures to tackle the coronavirus epidemic. Some ¥7 trillion is now left in the coronavirus reserves.
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