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TOKYO (Jiji Press) — The Japanese government adopted on Friday a new stimulus package worth ¥78.9 trillion to cushion the impact of the prolonged novel coronavirus pandemic on the economy.
The package, approved at an extraordinary cabinet meeting, includes record fiscal spending of ¥55.7 trillion. It is projected to boost Japan’s real gross domestic product by around 5.6 pct, according to the Cabinet Office.
The package features measures to realize a virtuous circle of economic growth and wealth redistribution, a signature policy of Prime Minister Fumio Kishida, such as a program to distribute benefits worth ¥100,000 for people under 19.
“We will rebuild the economy damaged by the coronavirus crisis, facilitate the resumption of social and economic activities and put the economy on a growth path as soon as possible,” Kishida said at a meeting of the Council on Economic and Fiscal Policy earlier Friday.
State funds account for ¥43.7 trillion of the total fiscal spending. The government will finance the package with a fiscal 2021 supplementary budget and the fiscal 2022 regular budget.
The extra budget will have ¥31.6 trillion in general-account spending and ¥400 billion in special-account expenditures. The government aims to adopt the extra budget at a cabinet meeting Nov. 26 for enactment by year-end.
Of the 55.7-trillion-yen fiscal spending in the stimulus package, ¥22.1 trillion will go to measures to prevent the spread of the coronavirus, and ¥9.2 trillion to programs to resume social and economic activities.
The government will also set aside ¥19.8 trillion for projects to launch a new form of capitalism, another key policy of Kishida, and ¥4.6 trillion to enhance disaster prevention and mitigation to make the country more resilient to natural disasters.
Furthermore, the government will secure ¥5 trillion in fiscal 2022 as reserve funds that the government can use without parliamentary approval to deal with the coronavirus crisis.
The package also includes a program to raise wages of nurses, elderly care workers and nursery teachers as part of Kishida’s redistribution policy.
The government will provide financial aid worth ¥100,000 to needy households exempted from residential tax payments and struggling students, in addition to the benefits for people under 19.
Cash relief of up to ¥2.5 million will be paid to small and midsize businesses experiencing revenue drops due to the coronavirus crisis.
Also planned is ¥500 billion in aid to help expand domestic production capacities for strategically important goods such as semiconductors and pharmaceuticals in order to enhance economic security. The government’s Go To Travel tourism promotion program will be resumed after a planned revision.
