With an eye on elections, Japan's ruling party considers cash payouts in stimulus plan (updated)
06/07/2021 05:07
* LDP policy head floats 100,000 yen cash payouts per
citizen
* Finmin Aso seen resisting uniform payouts as source of
debt
* Lawmakers call for more COVID-19 spending as elections
loom
(Adds minister's comment, detail, context on fiscal policy)
By Tetsushi Kajimoto and Daniel Leussink
TOKYO, July 6 (Reuters) - Japan will consider a one-off cash
payout of 100,000 yen ($901.55) to its low-income citizens to
ease growing social disparity caused by the coronavirus
pandemic, public broadcaster NHK quoted the country's ruling
party policy chief as saying.
Hakubun Shimomura, the Liberal Democratic Party's policy
research council chief, said he would propose the government
include the cash payout in a fresh economic package and make it
part of the party's pledge for general elections.
The general election is due later this year.
The comment from the Liberal Democratic Party's heavyweight
raises the spectre of another large-scale fiscal stimulus at a
time Finance Minister Taro Aso has voiced concern about the
massive debt pile.
Shimomura said it would be hard for non-regular workers and
single parent families to ride out the pandemic without
financial assistance, NHK reported.
However, Aso has opposed uniform cash payouts, which he has
repeatedly said would leave nothing but a debt pile for the
future generations.
Economy Minister Yasutoshi Nishimura left open the
possibility of an extra spending plan down the road.
"We have coronavirus emergency reserves left worth 4
trillion yen, so would respond flexibly to take necessary steps
with eyes on the economic situation," Nishimura told reporters
after a cabinet meeting.
Japan could craft an extra budget of around 10 trillion yen
without issuing additional interest-bearing bonds thanks to tax
overshoot from the last fiscal year as well as front-loading the
issuance of rollover bonds and sales of treasury bills, said
Chotaro Morita, chief bond strategist at SMBC Nikko Securities.
Any bigger spending could entail fresh borrowing that would
add to the industrial world's heaviest debt at over twice the
size of Japan's $5 trillion economy, and would follow a hefty
$3 trillion of COVID-19 stimulus deployed over the past year.
($1 = 110.9200 yen)
(Reporting by Tetsushi Kajimoto; editing by Jane Wardell & Shri
Navaratnam)
((tetsushi.kajimoto@thomsonreuters.com;))