Coronavirus: Japan may expand state of emergency nationwide, as Abe plans cash payouts for all

TOKYO (REUTERS) – Japan was preparing to extend a state of emergency beyond major cities to the entire nation, media reported on Thursday (April 16), and a government official said Prime Minister Shinzo Abe will change a draft supplementary budget to include cash payouts for everyone.

The government has declared an emergency in Tokyo and six other areas including Osaka, with more than 9,000 infections nationally and nearly 200 deaths, but other regions have asked to be added, amid worries about the persistent spread of the virus.

Still some way short of a lockdown, the state of emergency introduced on April 7 and imposed for a month gave the authorities more power to press people to stay at home and businesses to close. It currently covers about 44 per cent of Japan’s population.

NHK public broadcaster and other media reported on Thursday that the country was preparing to expand the emergency nationwide amid pressure on Mr Abe to do more amid perceptions his response to the virus in general has been too little, too late.

Chief Cabinet secretary Yoshihide Suga said a meeting of experts would be convened later on Thursday about expanding the state of emergency.

The coronavirus has bitten deep into the world’s third-largest economy. Under the current supplementary budget plan, the government has set aside funds for cash payouts of 300,000 yen (S$3,970) but only for households whose income is judged to have been hit by the coronavirus.

Mr Abe’s administration will change the plan and instead deliver 100,000 yen to every citizen, the official with direct knowledge of the matter told Reuters.

The change would be a nod to growing calls from ruling and opposition lawmakers for Mr Abe to take bolder steps to help people weather the economic impact from the pandemic.

The International Monetary Fund, which expects Japan’s economy to contract 5.2 per cent this year, urged the government to boost fiscal spending and focus on easing the hit to growth.

“In the near term, expansionary fiscal policy is warranted to mitigate the impact of the Covid-19 in the short term and support the recovery afterwards,” said Mr Odd Per Brekk, deputy director of the IMF’s Asia and Pacific department.

Rising coronavirus cases and business closures are piling pressure on Japan’s economy, which is on the cusp of recession.

Sources have told Reuters the Bank of Japan is likely to project an economic contraction for this fiscal year and discuss further measures to ease corporate funding strains at its rate review on April 27-28.

The draft supplementary budget, compiled to fund a near US$1 trillion (S$1.43 trillion) stimulus package Mr Abe’s administration unveiled last week, needs Parliament approval to take effect.

It is rare for the government to make changes to a draft budget, which is carefully mapped out by the finance ministry, taking into account the various views of politicians.

Any such modification would underscore the challenge Mr Abe faces in dealing with the deepening economic toll from the pandemic, without adding too much strain to Japan’s already tattered finances.

A Reuters poll showed most Japanese corporations were disappointed by the government’s stimulus plan as being too little, too late.

Surveys show Mr Abe has lost support due to what critics say is a timid and sluggish response to the outbreak, and by widespread criticism that he has appeared tone deaf to the severity of the crisis in his own social media posts.

Support for Mr Abe’s Cabinet fell to 39 per cent in an NHK survey published on Monday, down four points, with 75 per cent saying his April 7 declaration of a state of emergency came too late.

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