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Speech on Fiscal Policy by Minister of Finance Aso at the 201st Session of the National Diet

Speech on Fiscal Policy by Minister of Finance Aso at the 201st Session of the National Diet

April 27, 2020

We have prepared a draft supplementary budget for FY2020 in response to “Emergency Economic Measures to Cope with COVID-19,” which was recently approved by the Cabinet. Before requesting deliberation on it, I would like to provide an outline of the draft supplementary budget.

(Current state of the Japanese economy and basic approach to the Emergency Economic Measures)

The novel coronavirus disease has had a tremendous impact on domestic and overseas economies. As for the outlook, the situation is expected to remain extremely severe until we can limit the spread of the disease.

Based on this recognition, in addition to “Comprehensive Economic Measures to Create a Future with Security and Growth,” we wish to formulate a new supplementary budget and to mobilize a variety of unprecedented policy measures, including budgetary, financial, and tax measures. Accordingly, the Cabinet has drafted a fiscal expenditure of 48 trillion yen, with a project scale of 117 trillion yen for “Emergency Economic Measures to Cope with COVID-19.”

To be specific, first, in the “Emergency Support Phase” until the end of the spread of the disease is in sight, we will be implementing measures to prevent the spread of the disease. We will build medical treatment structures, such as the creation of the “Emergency Comprehensive Support Grant for Novel Coronavirus Disease”, and make a strong effort to resolve the situation soon. Then we will expand special measures for employment adjustment subsidies, providing the strongest-ever financial support. Also, we aim to create a new benefit system for small-sized enterprises (SMEs) and people all over the country. These efforts will be made to protect people’s employment, businesses, and daily lives.

Second, in the “V-shaped Recovery Phase” toward the strong recovery of economic activities after the threat subsides, we would like to take measures from two aspects: as a campaign to stimulate demand in severely affected areas, such as tourism, transportation, food service, and events, through large-scale support measures involving the public and private sectors, and promoting investment for the future, in areas such as digitalization and remote working.

(Summary of the FY2020 supplementary budget)

Next, I would like to outline the FY2020 supplementary budget, which I submitted to the Diet mainly for implementing the emergency economic measures.

Regarding the general account, we are planning to add an expenditure of approximately 25.69 trillion yen in total. Based on the emergency economic measures, we will allocate approximately 1.81 trillion yen for expenses related to “Measures to prevent the spread of the disease, build medical treatment structures and develop the pharmaceuticals”, approximately 19.49 trillion yen for expenses related to the “Recovery of economic activities with the concerted efforts of public and private sectors as the next stage”, approximately 920 billion yen for expenses related to “Building a robust economic structure” and 1.5 trillion yen to contingency reserve funds for COVID-19 for “preparing for the future.” Furthermore, we will allocate approximately 130 billion yen to the special account for the National Debt Consolidation Fund.

Regarding the financial resources, we will issue construction bonds of approximately 2.33 trillion yen and special deficit-financing bonds of approximately 23.36 trillion yen.

As a result, the total general account budget for FY2020, after the supplement, will be approximately 128.35 trillion yen, which approximately 25.69 trillion yen more in both revenue and expenditure.

Necessary supplements were also made to other accounts’ budgets, including the special account budgets.

As for the fiscal investment and loan program plan, to strongly support the continuation of businesses with consideration for the emergency economic measures, we have added approximately 10.19 trillion yen. This will ensure financial measures for small-sized, medium-sized, leading medium-sized, and large-sized enterprises.

(Concluding remarks)

This concludes my explanation of the outline of the draft supplementary budget for FY2020.

I hereby request that the Diet deliberate on this supplementary budget and promptly give its approval.