Japan to review COVID-19 subsidies for businesses
Japan plans to review its COVID-19 subsidy programme targeted at small and medium-sized firms, according to Finance Ministry officials.
The programme may lead businesses to depend too much on subsidies and overinvestment, the officials said at a meeting of the Fiscal System Council, reports Nippon news.
To support pandemic-hit firms, the subsidy provides a cap of 100 million yen (US$878,291) of support per recipient, aimed at covering up to 75% of costs needed for helping businesses reconstruct operations, such as winding up existing operations and entering new ventures.
The government has set out 1148.5 billion yen (US$10.09 billion) under its third supplementary budget for fiscal 2020 for the subsidy programme, and has so far selected recipients for almost half of the funds budgeted under the programme.
At the peak of the pandemic in April 2020, businesses were struggling to keep afloat and had to retrench their workers. This was reflected in a surge in welfare consultations with local governments across the country, which saw an increase in the number of consultations for those who lost their jobs due to the pandemic.