Tokyo, April 21 (Jiji Press)–Japan’s ruling Liberal Democratic Party and its coalition partner, Komeito, agreed Thursday to set the size of a planned emergency economic package at around 1.7 trillion yen.
The package, intended to mitigate the impact of rising prices of goods and services, will include plans to provide low-income child-rearing families with 50,000 yen in aid per child and expand existing subsidies related to surging crude oil prices.
Prime Minister Fumio Kishida is expected to announce the details of the emergency package as early as Tuesday.
The stimulus measures will be financed by reserve funds set aside under the government’s fiscal 2022 budget, according to the two parties’ agreement, reached at a meeting between LDP Secretary-General Toshimitsu Motegi and his Komeito counterpart, Keiichi Ishii, on Thursday.
A fiscal 2022 supplementary budget, expected to be on the scale of around 2.5 trillion yen, will be compiled to replenish the reserve funds, the two parties also confirmed. They will aim to enact it during the ongoing regular session of the Diet, Japan’s parliament.
After their meeting, the secretaries-general visited the prime minister’s office to report their agreement to Kishida. The prime minister said that he will instruct his government to begin compiling a supplementary budget.
The ruling parties had been at odds over how to pay for the measures, with the LDP looking to use the fiscal 2022 budget reserves and Komeito calling for the compilation of an extra state budget.
The LDP was worried that the compilation of a supplementary budget would require Kishida to attend budget committee meetings in the Diet, which would give the opposition camp an opportunity to grill his administration ahead of this summer’s election for the House of Councillors, the upper chamber of the Diet.
“There was never a time when drawing up an extra budget before an Upper House election worked out well,” an LDP source said.
However, a senior LDP official said that the party made a concession to Komeito on its demand for a supplementary budget, in order to “save Komeito’s face.”
The LDP sought to emphasize unity within the ruling coalition to avoid negative implications for the Upper House poll.
The emergency package will include measures against rising crude oil prices, as well as those for the stable supply of energy, materials and foods, for small companies and for the needy.
The government is expected to allocate 300 billion yen for measures against rising oil prices for May, 1 trillion yen for expanding emergency subsidies for regional revitalization and 200 billion yen for the 50,000-yen benefits program for child-rearing families.
Meanwhile, the Democratic Party for the People, which has been holding talks with the LDP and Komeito recently, is demanding that the government lower the gasoline price threshold for providing the oil subsidies from 172 yen per liter to below 170 yen.
A senior Komeito official said that the size of the extra budget may balloon to as large as around 2.7 trillion yen if the oil subsidies increase. The official added that an increase in the oil subsidies would likely be funded by deficit-covering bonds.
Motegi told reporters that the supplementary budget is likely to be compiled “around late next month.”
Ishii said that he is not considering an extension to the ongoing Diet session, which is scheduled to end on June 15.