Abe vows to double Japan's virus relief package to over ¥200 tril
TOKYO — Prime Minister Shinzo Abe said Monday the Japanese government will almost double its emergency package to address the economic fallout from the coronavirus pandemic to over 200 trillion yen ($1.86 trillion) from the current 117.1 trillion yen.
The Cabinet will approve a second supplementary budget for fiscal 2020 to finance additional stimulus measures for struggling smaller businesses as well as workers and students, Abe told a press conference at which he also lifted a state of emergency that was still in force in Tokyo and four other prefectures, paving the way for the restart of the economy.
"The scale of the package will be unprecedented, corresponding to 40 percent of the country's gross domestic product," he said. "I'll defend the Japanese economy against the once-in-a-century crisis through the world's biggest countermeasures."
The size of the extra budget is not yet known. The government is aiming to enact it by June 12, government source said.
The state of emergency was originally declared on April 7 for Tokyo, Osaka and five other urban areas which then had relatively high numbers of COVID-19 cases. It was expanded nationwide nine days later.
The emergency declaration was lifted in 42 of the 47 prefectures by Thursday. On Monday, Abe ended it for the remaining five -- Tokyo, Chiba, Kanagawa, Saitama and Hokkaido -- ahead of its planned expiration next Sunday.
The additional stimulus includes government and Bank of Japan programs worth over 130 trillion yen to facilitate fundraising by companies, as well as the government's fiscal investment and loan program, and investment by the private sector.
Among other steps, the government will provide support to businesses struggling to pay rent and also increase subsidies for firms retaining employees despite falling sales due to the pandemic.
In addition, the government will provide cash handouts of up to 200,000 yen each to around 430,000 university and other students struggling to pay tuition due to business closures that have deprived them of part-time jobs and reduced parental income.
The second extra budget comes after the government set aside 25.7 billion yen under the first one, enacted last month to finance measures such as 100,000 yen cash handouts per person to underpin private consumption.
The supplementary budgets will be financed by government issuance of deficit-covering bonds, fueling concern about the country's fiscal health, the worst among major economies. Japan's public debt already exceeds 1,100 trillion yen.
But the government has dismissed such concerns at a time of national crisis.
"Now is not the time to worry about fiscal reconstruction," economic revitalization minister Yasutoshi Nishimura told a parliamentary committee session, adding, "It's more important than anything else to secure a necessary budget to protect people's livelihoods, employment and businesses."