print PRINT


Editorial: Policy aid must be increased for extended state of emergency

  • May 1, 2020
  • , The Asahi Shimbun , 2:24 p.m.
  • English Press

Prime Minister Shinzo Abe indicated on April 30 that he plans to extend the state of emergency over the new coronavirus outbreak for about a month beyond the initial May 6 deadline.


The extension means that people’s lives and economic activities will remain subject to tight restrictions for the time being. The government needs to be prepared to make the best possible policy response to the economic repercussions from the decision.


What the people want to know now are what will become of their lives in the coming months and how much support they will receive from the government. 


The Diet on April 30 passed the first fiscal 2020 supplementary budget to finance 25.7 trillion yen ($239.90 billion) of spending to put the economy, devastated by the pandemic, on life support.


But things have gotten much worse since the government started working out the spending plan.


Abe failed to offer reassuring words during the Diet deliberations on the supplementary budget. He only repeated his vague promise to “make bold decisions if (the measures) turn out to be insufficient” without talking about any specific ideas. Many Japanese must have been left feeling uncertain about the future.


The passage of the supplementary budget was delayed by one week because of Abe’s sudden turnabout regarding a cash handout program.


It is a race against time to take effective steps to rescue many people from the desperate financial straits they are in because of the outbreak.


To compensate for the delay, the Abe administration needs to enhance its cooperation with local governments to ensure that people can receive the money as soon as possible.


Given the likelihood that the economy will remain in the sick bed for long, however, it is obvious that the current rescue plan will be far from sufficient.


The plan, for example, will provide up to 2 million yen in cash to small and midsize businesses whose revenues have shrunk by half or more.


But restaurants will eat up the funds in three and a half months simply by paying their rents, while the amount will cover only one month of rent for such entertainment facilities as theaters and pachinko parlors, according to a survey conducted in fiscal 2017 by the Small and Medium Enterprise Agency.


Many of these businesses saw their sales plummet in March.


The 1 trillion yen emergency fund to help finance local governments’ financial support to businesses that have closed in response to government requests will be exhausted quickly. The government will dole out 100,000 yen in cash per head to all residents in Japan.


But the average Japanese consumer will burn through the funds in just one month.


The extension of the state of emergency could ruin the finances of many small and midsize business as well as non-regular workers who have lost their jobs.

The government needs to act with dispatch to cobble together an additional economic relief package and announce it to the public.


Another issue that has emerged demanding a quick policy response is how to help restaurants and other vulnerable businesses struggling to pay their rents amid tumbling sales.


Opposition parties have jointly drafted a bill to tackle the issue and submitted it to the Lower House. The bill calls for government-affiliated financial institutions to pay the rents for cash-strapped small and midsize businesses as a moratorium on their obligations.


The ruling Liberal Democratic Party also started debate April 30 on a proposal to establish a relief program for these businesses. The ruling and opposition parties should make nonpartisan efforts to hammer out a rescue plan for vulnerable businesses as quickly as possible.


There are many roles the government should play in the efforts to ride out the current crisis. But government spending cannot be increased indefinitely.


The nation’s collective wisdom is required to ensure that policy aid will reach the people who really need it.

  • Ambassador
  • Ukraine
  • COVID-19
  • Trending Japan