THE JAPAN NEWS

 

 
 
The government on Tuesday approved an additional economic package worth ¥73.6 trillion, including ¥51.7 trillion for projects aimed at re-configuring the nation’s economy and bringing it back to pre-pandemic levels. It also contains measures aimed at accelerating the introduction of digital technology and the reduction of carbon emissions.

The package was adopted at an extraordinary Cabinet meeting on the day. Part of the funding for its various measures will consist of ¥40 trillion in fiscal spending — including money to be paid by local governments — in a third supplementary budget for fiscal 2020 through next March and the initial budget for fiscal 2021, jointly deemed “the 15-month budget.”

At a meeting of the government’s Council on Economic and Fiscal Policy held at the Prime Minister’s Office on Tuesday, Prime Minister Yoshihide Suga said, “In addition to financial support for medical institutions and helping companies raise funds, measures aimed at new growth have also been incorporated [in the package].”

The latest package follows two extra budgets for the current fiscal year that were earmarked to fight the novel coronavirus. It will bring the value of stimulus measures so far to a total of more than ¥307 trillion, equivalent to 60 percent of Japan’s gross domestic product. The government estimates that the stimulus measures will boost the nation’s GDP by 3.6 percent.

The latest package mainly comprises 1) measures to prevent the spread of novel coronavirus infections (¥6 trillion); 2) spending to re-configure the nation’s economy and bring it back to pre-pandemic levels (¥51.7 trillion); and 3) measures to prevent or mitigate damage from and enhance resilience against natural disasters (¥5.9 trillion).

As it is difficult to predict future events, the government will secure a reserve fund of ¥5 trillion in the initial budget for fiscal 2021.

Of the ¥40 trillion in fiscal spending, ¥30.6 trillion will be provided by the central government and ¥1.7 trillion by local governments, while the remaining ¥7.7 trillion will come from the Fiscal Investment and Loan Program, under which the government secures funds and extends low-interest loans to companies.

With such funding as loans from financial institutions added to the fiscal spending, the latest package will be worth a total of ¥73.6 trillion.
As budgetary measures accompanying the additional economic package, the government plans to include ¥19.2 trillion in the general account and ¥1 trillion in the special account of the third supplementary budget, which will be compiled next week.

The government will reinforce medical service systems to prevent the spread of infections, through such measures as securing more hospital beds. It will increase emergency comprehensive support grants to medical institutions, which are provided through prefectural governments, while promoting increased production of testing kits and greater readiness to administer vaccinations.

As part of efforts to re-configure the nation’s economy, the government will establish a ¥2 trillion fund for companies developing green technologies and work to reduce greenhouse gas emissions to effectively zero by 2050.

The government will also extend through end of next June its Go To Travel campaign to promote domestic travel and its Go To Eat program for dining out, in a bid to balance measures to combat the coronavirus and to keep economic activities going.

The government will extend through next February the employment adjustment subsidy, a special measure to subsidize companies that have had to pay allowances to employees taking time off work. It will also expand the scale of its projects aimed at reinforcing the nation’s resilience against natural disasters.