As a financial measure to cope with the spread of the new coronavirus, the government plans to distribute gift certificates to support households, instead of the originally planned cash handouts, according to a framework for an emergency economic stimulus package revealed Monday by several government sources.
The framework includes measures to support industries hit hard by the outbreak, such as the restaurant business, and also expands the government subsidy system to boost tourism.
The scale of the emergency package is expected to worth more than 30 trillion yen, including the use of private-sector funds. This amount would be combined with 26 trillion yen in an economic stimulus package adopted at the end of last year, and the resulting total will far exceed the 56.8 trillion yen economic package allocated at the time of the 2009 Lehman crisis.
To support household spending, the government will distribute time-limited gift certificates and coupons for restaurants and sightseeing. Some members of the ruling bloc still have a preference for across-the-board cash handouts, but the government has dismissed the idea, believing that the cash would likely go into savings and not toward spending.
Some in the ruling coalition have called for a rollback in the consumption tax rate, but the government is not considering this, believing that a tax cut "cannot generate instant results, compared with gift certificates," according to a government official.
As part of measures to promote tourism after the outbreak ends, the government will expand the subsidies for reconstruction, in which the central government now shoulders part of accommodation and other fees to be paid to hotels and inns located only in areas affected by the 2011 Great East Japan Earthquake. To cope with the virus outbreak, the government will implement the system nationwide.
It will also consider refunding part of corporate taxes for the previous fiscal year to small and midsize companies that have fallen into the red. It plans to support restaurants and other businesses by handling the outbreak in the same way as a natural disaster.
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