Since the Kan administration took office in September, there has been a lot of attention paid to the measures taken to combat the coronavirus, which continues to spread, as well as statements on breaking down the stove-piped administration through public-private digitalization and efforts to decarbonize the economy by 2050.
Additional economic stimulus measures were decided at the extraordinary Diet session on December 8, mainly on these topics. The scale of the project is 73.6 trillion yen. Let's take a closer look at the details.
|Breakdown of additional economics measures||Financial Expenses||scale|
|Preventing the spread of Corona infection||5.9 trillion yen||6 trillion yen|
|Growth strategies such as digital and decarbonization||18.4 trillion yen||51.7 trillion yen|
|Disaster prevention and mitigation and other measures to strengthen national land||5.6 trillion yen||5.9 trillion yen|
|emergency funds||10 trillion yen||10 trillion yen|
|Total||40 trillion yen||73.6 trillion yen|
Kan have invested 51.7 trillion yen, or about 70% of the total, in growth strategies such as decarbonization and digitalization. This shows that the government is very conscious of the fact that the coronavirus infection is coming to an end and is trying to promote change.
At a meeting of the Council on Economic Advisors on August 8, Prime Minister Kan said, "We have included measures for new growth, such as green and digital measures, and we expect the direct economic impact to be about 3.6% of GDP.
Decarbonization and digitalization have been the signature policies of the Kan administration, and it is clear that they are going to put a lot of effort into them.
Let's take a look at the outline of the measures.
Outline of the additional economic measures approved by the Cabinet on August 8
・Increase the amount of emergency comprehensive support subsidy for prefectures for medical support
・Increase in emergency comprehensive support subsidy for prefectures to support medical care
・Additional 1.5 trillion yen in temporary grants for regional development
・Digital fund for unification of municipal system specifications
・Online administrative procedures such as tax payment, registration, passport application, etc.
2. Green investment
・2 trillion yen over 10 years for carbon neutral technology development fund
・Up to 1 million yen worth of points for local residents to purchase eco-friendly homes.
3. Transformation of economic structure
・Subsidies of up to 100 million yen for capital investment by small and medium-sized companies undergoing business transformation
・Extend government-affiliated financial institutions' virtually interest-free and unsecured loans until the first half of 2021.
4. Private demand-led virtuous cycle
・Extend the GoTo Travel policy until June 2021.
・Additional issuance of GoTo Eat policy
・Extension of special measures for employment adjustment subsidies until February 2021.
Disaster prevention, disaster mitigation, and national land toughening
Aiming for a project scale of 15 trillion yen between 2021 and 2025
Use of reserve funds
5 trillion yen of reserve funds also included in the initial budget for 2021.
It is a trend in major countries to focus on the environment and digital technology to raise the growth rate after Corona.
Mr. Biden, who is sure to win the U.S. presidential election, has also announced a policy of investing $2 trillion in clean energy infrastructure and technology over four years.
In the U.K., he has announced that he will invest 12 billion pounds to create 250,000 jobs in renewable energy and other fields by the year 30, and in France, he has announced that he will invest in the development of digital and other next-generation technologies.
Following the first and second rounds of supplementary spending, which totaled more than 230 trillion yen, these large-scale measures have ensured that new government bond issuance in fiscal 2008 will exceed 100 trillion yen for the first time. However, most observers believe that long-term interest rates will remain flat because the Bank of Japan will increase its purchases even if the issuance is increased.
At the extraordinary Diet session this year, the basic policy for the budget for fiscal year 2021 was also decided, and as with the additional measures, it is said to be to prevent the spread of infectious diseases and to strengthen growth by realizing digitalization and a green society.
However, with regard to fiscal soundness, the policy does not mention the goal of achieving a primary balance surplus by fiscal 2013, which has been included in previous years, but instead states that "the economy is the key to fiscal soundness.
～Infection status in Japan as of December 8
Those requiring hospitalization...22,339
Discharged or released from hospital...138,994
Those who tested positive...44,355
Newly infected (8 days)...352