Japan Govt pondering to add cash handouts worth $18 Bn for children aged 18 and below

The government of Japan intends to include a cash handout of 100,000 Yen for children aged 18 and below in a large-scale economic stimulus package to be completed this month, according to The Yomiuri Shimbun. The Newspaper, citing a source, stated that the government is also working on a plan to award 30,000 Yen in points to all holders of My Number identification cards. Handouts for an expected total of 20 million youngsters, ranging in age from newborns to 18-year-olds, will cost almost 2 trillion Yen, according to government estimates.

The government intends to give handouts by the spring of next year, when kindergarten and school sessions commence. It intends to use approximately 4.5 trillion yen of surplus revenues from fiscal 2020 to fund the handouts. The economic plan, which is scheduled to be drafted as early as November 19, will most likely be in the tens of trillions of yen range. The administration and ruling parties expect to adopt a supplementary budget for the current fiscal year, which includes cash for the package, by the end of this year.

In its campaign commitment for the House of Representatives election, Komeito, the ruling Liberal Democratic Party's junior coalition partner, included 100,000 cash handouts and a plan to distribute points for limited usage in education and child-rearing. The LDP, on the other hand, suggested a policy of concentrating assistance primarily on non-regular workers and those in need.

Kazuo Kitagawa, Komeito Vice Representative, said at a press conference on Thursday, November 4, “providing cash when it is needed is the most appropriate thing to do.”

Shinzo Abe's Cabinet decided in April '20 to distribute 100,000 yen cash handouts

The ruling parties are hammering out the details of cash handouts for non-regular workers and individuals in need separately from the payout for children. As part of the government's COVID-19 pandemic reaction, former Prime Minister Shinzo Abe's Cabinet decided in April last year to distribute 100,000 yen cash handouts each person across the board. However, it is believed that the measure had a limited impact on increasing spending because the majority of the money went into savings accounts. By awarding points to My Number cardholders, the government hopes to increase card usage, promote consumption, and advance its digitization goals. The approximately 3 trillion yen required to support the system will be included in the fiscal package.

(With inputs from agencies)

Image: AP