Contain Pandemic through Effective Spending in New Economic Stimulus Package

Effective budgeting is important to overcome the novel coronavirus pandemic. Every possible measure should be taken to strengthen the medical system and support people in need.

The central government has decided on an additional economic package worth ¥73.6 trillion, including loans to be extended by financial institutions and local government expenditures. It compiled economic stimulus measures worth more than ¥110 trillion each in April and May. Large-scale fiscal spending will be continued.

Of the ¥40 trillion earmarked for fiscal spending, the central government will cover about ¥31 trillion. Most of the national expenditures will be procured in a third supplementary budget for fiscal 2020 through next March, with the remaining about ¥10 trillion transferred to the fiscal 2021 budget, effectively making this a 15-month budget.

Measures to prevent the spread of the coronavirus represent the main pillar of the economic stimulus package.

Many medical institutions that actively deal with coronavirus patients are said to be experiencing a downturn in business due to a decrease in the number of general patients, with nurses and other medical workers leaving their jobs.

To prevent the collapse of medical services, the implementation of subsidies provided to key medical institutions with special wards to deal with coronavirus patients must be expedited urgently. The government also needs to strongly support preparations for vaccinations and the development of drugs for the infectious disease.

It is necessary to take measures to avoid the stagnation of economic activities while making efforts to contain the pandemic.

The government will add ¥1.5 trillion in special subsidies for regional revitalization to support the coronavirus measures of local governments. The subsidies will be used, among other purposes, to help eating and drinking establishments that respond to requests to shorten their business hours, out of consideration for requests from local governments to continue the subsidies.

However, there have been a series of cases in which the subsidies were used for such things as distributing school bags for new elementary school students and purchasing official vehicles, expenditures that are difficult to deem coronavirus measures. The central government must check whether the subsidy system is being used appropriately.

The government has taken special measures to increase the upper limit of employment adjustment subsidies to help companies pay allowances to workers who have been put on leave. It plans to extend the special measures, which were set to expire at the end of December, to the end of February.

The new stimulus package also includes another special aid handout by the end of the year to single-parent households, among others. It is natural to help people with financial difficulties.

The additional measures include an extension to the end of June in principle for the government’s Go To Travel domestic tourism promotion campaign, which was scheduled to expire at the end of January next year, with plans to refocus the subsidy program to weekdays.

Amid the pandemic, caution is required concerning measures to stimulate demand that could increase travel. A system must be considered in which the program can be suspended or resumed flexibly.

For medium- to long-term economic growth, the government will set up a ¥2 trillion fund to support companies developing environmental technologies and another fund to strengthen universities’ research bases. It also plans to earmark more than ¥1 trillion to promote digitization in the public and private sectors. The government is urged to invest intensively in growth areas.

— The original Japanese article appeared in The Yomiuri Shimbun on Dec. 9, 2020.