Japan gov't submits reworked extra budget to mitigate virus' economic blow



The Japanese government on Monday submitted a reworked supplementary budget to the parliament to finance a number of emergency measures to help mitigate the overall economic blow from the coronavirus pandemic.

"The virus infections have been exerting an enormous impact on the domestic and overseas economies, and the extremely severe situation is expected to continue until we can see signs of the outbreak coming to an end," Japan's Finance Minister Taro Aso said in the lower house, calling for the budget's speedy approval.

"We've decided to take every possible policy measure such as fiscal, financial and taxation steps, without being bound by precedents," Aso said, vowing to "fully protect employment, businesses and livelihoods."

On April 20, Japan's Cabinet approved an upwardly revised extra budget of 25.69 trillion yen (240 billion U.S. dollars) for fiscal 2020, compared to an initial 16.81 trillion yen extra budget decided earlier in April.

In a rare move, the initial emergency and extra budget had to be reworked to cover the 100,000 yen nationwide cash handout program to around 126 million people in Japan, at a cost of 8.88 trillion yen, along with other allocations aimed at mitigating the economic fallout of the pandemic here.

Japanese Prime Minister Shinzo Abe announced on April 17 that the government will provide a 100,000 yen cash handout to all citizens regardless of their income level to help them deal with the economic impact of the coronavirus.

The one-time cash handout replaces an earlier plan to provide 300,000 yen to households whose income had fallen to a certain level as a result of the virus.

Abe's ruling coalition Komeito party ally had initially floated the idea, and leaned on the prime minister to agree to the plan and bring it to fruition quickly, saying that the blanket 100,000 yen cash handout plan should replace the previous 300,000 yen plan.

The allocation for the cash handout will be financed by issuing more deficit-covering bonds.

The reworked budget is likely to be approved by the lower house of parliament on Wednesday, a rare time for the government to convene being that it is a national holiday, and enacted by the upper house of parliament a day later.

The government is planning for the cash handouts to be given out to each of its residents by the end of May.

The emergency package also allocates funds to the tune of 1 trillion yen to local governments so they can provide fiscal support to businesses complying with local authorities' requests to shutter their operations until the nationwide state of emergency comes to an end on May 6, under the government's current plans.

In addition, the budget has also been compiled to make provisions so that the country's supply of the anti-influenza drug Avigan, shown to have positive effects in treating the symptoms of some COVID-19 patients, can be increased threefold at a cost of 13.9 billion yen.

The extra budget will also help fund a record high overall economic package that was increased from an initial 108.2 trillion yen to 117.1 trillion yen, in part, so the emergency funding could cover the government's hasty decision to provide across-the-board cash handouts of 100,000 yen to those living in Japan.

The government's latest supplementary spending package far eclipses the package compiled in the wake of the 2008 financial global crisis when the government rolled out an emergency stimulus package worth 56.8 trillion yen to cushion the downside effects.

After the sales tax was raised from 8 to 10 percent here last October, a 26 trillion yen stimulus package was also approved thereafter to help counter the negative effects, also considerably less than the latest measures. (1 U.S. dollar equals 107.02 Japanese yen).