Japan: Govt approves 3rd fiscal stimulus amid surge in COVID-19 cases
The stimulus package will set aside 6 trillion yen (US$57 billion) to keep the outbreak in check, 51.7 trillion yen (US$663 billion) for structural economic changes for a post-pandemic transition, and 5.9 trillion yen (US$56 billion) to shore up disaster management and national resilience.
“We will maintain employment, keep businesses going, revive the economy and make a breakthrough toward growth, including through green and digital technology,” Prime minister Yoshihide Suga said.
The fiscal package is being put together as over 2,000 new cases daily have been reported in the country.
Central government outlays are expected to total 30.6 trillion yen (US$293 billion), divided between a third supplementary budget for fiscal 2020 and the budget for fiscal 2021, with additional spending coming from the private sector.
The government will help prefectural authorities to add more hospital beds and expand medical care capacity. Emergency grants for regional revitalisation, which municipalities outside big urban centres can use to support restaurants asked to shorten their hours, will be increased by 1.5 trillion yen (US$14 billion).
For a post-pandemic transition, a total of 4.5 trillion yen (US$43 billion), including fiscal investment and loans, will support the development of research infrastructure at universities. Around 1 trillion yen (US$9 billion) will be set aside to promote a digital shift at public schools.
The government will continue to offer subsidies for companies that relocate offshore capacity to Japan. This applies to medical products and other manufactured goods whose production is concentrated abroad.
SMEs that change business formats will have access to subsidies up to 100 million yen. Meanwhile, 2 trillion yen (US$19 billion) will support research and development in net-zero greenhouse gas emissions.
The government will also boost reserve funds that can be used for combating the outbreak, a move that does not require parliamentary approval, said Nikkei Asia.