Japan to spend 36.0 trillion yen on pandemic stimulus package

49
2
Japan to spend 36.0 trillion yen on pandemic stimulus package

TOKYO Kyodo Japan's Cabinet is about to approve a record 36.0 trillion yen $314 billion supplementary budget for fiscal 2021 to fund the government's latest economic stimulus to put the coronaviruses on a recovery track.

It means that most of the extra budget will be financed by debt, which will cause a further blow to the country's fiscal health.

The budget for fiscal 2020 will be used to use 6.1 trillion yen.

The figure is smaller than the 108.6 trillion yen in the previous fiscal year when the government compiled three extra budgets totaling about 73 trillion yen to fight the coronaviruses, but the fear of a worsening of the nation's fiscal soundness, the worst among major developed nations.

Prime Minister Fumio Kishida said that his administration aims to have the supplementary budget clear the Diet in an extraordinary parliamentary session to be convened next month.

Kishida, who took office on October 4 and led the Liberal Democratic Party to victory in the Oct. 31 general election, aims to lead the domestic economy to recover to pre-pandemic levels while increasing support for households and firms.

Under the extra budget, 18.6 trillion yen will be used to reduce the spread of the disease and to ease the economic impact of the epidemic, including 1.7 trillion yen to increase funds for the government's unemployment insurance system and pay for allowances for furloughed workers.

In order to boost the pandemic-hit tourism sector, 268.5 billion yen will be allocated to restart the Go To Travel domestic tourism subsidy program, which was suspended nationwide last December after a spike in new virus cases.

Japan has seen relatively low numbers of new virus cases amid steady progress in the government's vaccine roll out, which has resulted in restrictions on economic activities being gradually loosened.

As part of Kishida's signature policy to boost Japan's economic security, 617 billion yen will be set aside to help chip-making companies secure production bases, including some 400 billion yen, to help Taiwan Semiconductor Manufacturing Co. build a new factory in the southwestern prefecture of Kumamoto.

The Cabinet approved a new economic package that's worth is about 78.9 trillion yen including private funds, has a record 55.7 trillion yen fiscal spending to weather the prolonged fallout from the pandemic.

Under the stimulus package, there are 100,000 yen handouts in cash and vouchers for children aged 18 or younger in households where the main earner's annual income is less than 9.6 million yen.

Some of the measures will be financed by the initial budget for fiscal 2022, which will be drafted next month, as well as the government's reserve fund for fiscal 2021 to deal with the Pandemic.

The Cabinet approved on Friday morning the use of 731.1 billion yen from the reserve fund to partially fund the handouts for children.