Cabinet Office (Japan), "Emergency Economic Measures to Cope with COVID-19" (Cabinet Decision on April 7, 2020, amended on April 20, 2020; summary, provisional translation)

Summary

A provisional-translation summary by Japan's Cabinet Office of Emergency Economic Measures to Cope with COVID-19, a Cabinet Decision of April 7, 2020, amended on April 20, 2020. It describes the global economy as facing the worst crisis ever in the post-war era and the Japanese economy as in a severe situation, and says that, with a declaration of a state of emergency, the government compiled new economic measures of huge fiscal size using fiscal, tax and regulatory tools. It sets out two phases for the measures and refers to a supplementary budget for FY2020 of 16.7 trillion yen for the General Account.

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“Cabinet Office (Japan), ‘Emergency Economic Measures to Cope with COVID-19’ (Cabinet Decision on April 7, 2020, amended on April 20, 2020; summary, provisional translation).” Original at www5.cao.go.jp. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/cabinet-office-japan-emergency-economic-measures-to-cope-with-covid-19-7c4e1c3313/, SHA-256 ac7f4008e62290d9888474ab1638c79085b27ab45bd3110132bdbed896bfb4df.

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provisional translation

Emergency Economic Measures to Cope with COVID-19
Cabinet Decision on April 7, 2020, Amended on April 20, 2020
(Summary)

April 2020
Cabinet Office

1
Emergency Economic Measures to cope with the Novel Coronavirus (COVID-19)
～Thoroughly secure people’s lives and move toward economic revitalization～
Current Conjuncture of the Economy and Basic Concepts of the Economic Measures

1. Domestic and overseas economies have been hit ruinously
• The global economy is facing the worst crisis ever in the post WWⅡ era. The Japanese economy is in severe
situation, extremely depressed by the impacts of COVID-19.
• Severe situation is expected to continue. Full attention should be paid to further downside risks to the
domestic and overseas economies.
2. The Government has decided to formulate a new emergency economic measures
• With the declaration of a state of emergency, the Govt compiled a new economic measures with huge fiscal
size, employing all policy tools including fiscal, tax and regulatory measures, in an unprecedented manner.
• The Govt will swiftly implement those measures, on top of “Comprehensive Economic Measures to Create a
Future with Security and Growth” (Cabinet Decision on Dec.5, 2019),
3. Two phases are set, considering time frame for strategic implementation of various measures
• The first phase, “Emergency Support Phase”, is the period until the end of the contagion in sight.
• The second phase, “V-shaped Recovery Phase”, refers to the period aiming at achieving strong recovery after
the end of contagion by stimulating demands and advancing social structural changes.
• The Government strategically puts each measure into practice along with the two phases in order to returns the
Japanese economy to a solid growth trajectory.
4. The Government will take any additional action as needed
• The Government will take timely and decisive actions as needed, with closely monitoring the development of
COVID-19 and its impact on the economies and daily life.
2
Emergency Support Phase
While containing the development of COVID-19, the Government thoroughly secures employments,
businesses and daily lives, to maintain solid bases for economic recovery after the end of contagion.
I. Measures to prevent the spread of the infection, build medical treatment structures, and develop
pharmaceuticals
1. Secure supply of masks and disinfectants
2. Enhance testing system and achieve early detection of the infection; e.g. doubling the PCR capacity to 20K/day
3. Strengthen medical care supply systems (concentrating on patients with severe symptoms)
; e.g. increase beds from 28K to 50K, secure 15K ventilators, enable remote medical examination at the first visit tentatively
4. Accelerate the development of therapeutic medication and vaccines; e.g. prepare the stockpile of Avigan to 2M doses
5. Increase capacity to cope with Japanese people returning from abroad (quarantine, etc.)
6. Strengthen public relations
7. International cooperation such as contributions to emergency assistance for infected countries
8. Support families with children amid tentative closure of schools

II. Protecting employment and keeping business viable
1. Secure employment; e.g. enhance the subsidy for leave allowance in case of avoiding dismissals, etc.
2. Financial measures (aka cash management support); e.g. effective zero interest loan without collateral through government
affiliated financial institutions, as well as private financial institutes (making use of the loan scheme of prefectures)
3. Support enterprises (esp. SMEs) facing difficulties in keeping business; e.g. new cash payment to SMEs and sole proprietors (incl.
freelancer) with turnover decreasing more than 50%.
4. Support individuals facing difficulties in daily lives; e.g. new cash payment of 100K yen to all residents in Japan, additional
child allowance of 10K yen per child
5. Tax measures; e.g. large scale deferment of tax and social security contribution, reduction or exemption of local property tax for
SMEs’ fixed assets
3
Emergency Support for Households Emergency Support for SMEs, etc.
 New Cash Payment to all residents in Japan  New Cash Payment to SMEs and Sole proprietors,etc.
 Cash payment to all residents for the purpose of  Approx. 2.3 trillion yen. Cash payment to a variety
fostering national solidarity against COVID-19 of businesses (incl. NPO, healthcare corporations,
 Amounting to Approx. 12.9 trillion yen etc.), which can be used in broad area.
 100K yen per person, tax exempt  2M yen to corporations and 1M yen to sole
 Application form sent by mail. Online application is proprietors, whose revenue falls by more than 50%
applicable in case of MyNumber Card holder in any month of 2020 from previous year.
 Additional child allowance of 10k per child  Financial Measures (support for cash management)
 On top of (regular) monthly 10K per child allowance,  No interest no collateral loan (w/ principal
tax exempt amortization deferred up to 5 years) through private
 Emergency microcredit to troubled households financial institutions, besides government affiliated
 Max 200K loan (no interest) to whose who need financial institutions (e.g. JFC).
temporary money, and additional loan (no interest) of  Refinancing of outstanding loans to no interest loan.
450K-600K for 3 months to those who rebuild their  Tax Measures
lives. Loans are forgivable in certain cases.  Enhance Tax and SS contributions deferment for
 Enhance rent support for low income households to business with rev falling by more than 20%, etc.
include those who are about to lose their dwelling due  Reduction or exemption of local property tax on
to decrease in revenue below certain thresholds. machinery and building for affected SMEs, etc.
 Reduction or exemption of social security  Request to landlords to consider rent deferment, etc.
contribution (healthcare, long-term care insurance) depending on tenant’s situation, while requesting
 Deferment of utility charges (request) banks to reschedule the landlord’s debt, etc.

 Enhancement of the subsidy for leave allowance (“employment adjustment subsidy”)
 From April to June, subsidy rates are raised from 2/3 to 9/10 for SMEs and 1/2 to 3/4 for large enterprises (on
condition of avoiding dismissals). Coverage enlarged to include non-regular workers (less than 20 hrs per week).
4
V-shaped Recovery Phase
The phase to achieve strong recovery by stimulating consumptions in affected sectors, as well as
investments for future such as digitalization and deployment of remote technologies
III. Recovery of economic activities through public and private cooperation as the next phase
1. Support affected sectors, such as tourism and transportation, food service, event and entertainment business; e.g. providing
incentives to consumption expenditure on related areas in form of price discount, voucher or point reward, etc.
2. Revitalize regional economy; e.g. supporting agriculture, forest and fisheries, revitalizing inbound tourism through strategic
promotions, etc. and supporting recommencement of sports and art events

IV. Making economic structure more resilient
1. Enhance resilience of supply chain; e.g. subsidy for relocating production sites of those goods depending on a specific
country and/or important for healthy daily lives (either domestically or through diversifying among ASEAN region, etc.)
2. Facilitate overseas businesses, and strengthen export and domestic production capacities of agriculture, forestry and
fisheries products and foods ; e.g. supporting overseas business of Japanese enterprises in Asian economies through
lending by JBIC and emergency yen loan to developing countries by JICA.
3. Accelerate digital transformation by deploying remote technologies; e.g. promoting telework among SMEs, accelerating
dissemination of PC/tablet to every pupil in compulsory education, and tentative removal of regulation to promote online
education.
4. Front-load public investment; swiftly implement public works included in FY2019 supplementary and FY2020 initial budget

V. Preparing for the future
Create new contingency reserve funds for COVID-19 (amounting to 1.5 trillion yen)

On top of the above, the Government establishes “Special Allocation for Regional Revitalization to cope with COVID-19”,
enabling local governments to implement detailed and necessary measures, corresponding to all measures listed in the Package. 5
Size of Measures (Approx., trillion yen)
Comprehensive Emergency Response Newly added
Economic Measures1 Package (1st and 2nd)2
Total
measures
Fiscal Expenses 9.8 out of 13.2 0.5 38.1 48.4
Total size 19.8 out of 26 2.1 95.2 117.1
(Note) Approx. 21% of GDP
1. A part of measures listed in “Comprehensive Economic Measures to Create a Future with Security and Growth” (Cabinet Decision on Dec. 5, 2019),
with its impacts expected to take effects from April.
2. Measures listed in “The First Novel Coronavirus Disease Emergency Response Package” (decided by the Meeting of the Novel Coronavirus Response
Headquarters on Feb. 13, 2020), and “The Second Novel Coronavirus Disease Emergency Response Package” (decided by the Meeting of the Novel
Coronavirus Response Headquarters on Mar.10, 2020)

Fiscal Expenses of 38.1 trillion yen on newly added measures
 27.5 trillion yen: FY2020 supplementary budget
of which 25.6 from general account (financed by additional issuance of JGB)
First pillar：1.8 tri (special allocation to local governments, etc.)
Second pillar: 19.5 tri (cash payments to enterprises and individuals, capital injection to JFC, etc.)
Third pillar: 1.8 tri (incentive for consumption expenditure on tourism, etc.)
Fourth pillar: 0.9 tri (subsidy for supply chain resilience, dissemination of PCs to pupils, etc.)
Fifth pillar: 1.5 tri (new contingency reserve fund)
 0.5 trillion yen: Expenses by local governments and Tax measures (e.g. local property tax), etc.
 10.1 trillion yen: Addition of FILP to FY2020 plan (mostly dedicated to the second pillar)

Total size of 95.2 trillion yen includes (i) tax and SS contribution deferment of 26 trillion yen, (ii) nearly
45 trillion yen of financial measures (e.g. credit line), (iii) other fiscal expenses (e.g. cash payments
amounting to 15.2 trillion yen) and private sector expenses. 6
Economic Impact Estimated by the Cabinet Office
I. Measures that support and boost GDP
Impact of measures that directly affect GDP (sum of the remaining impact of the December 2019 policy
package and the impact of new measures) is estimated to be approximately 4.4% of real GDP.

Approximately 4.4% of real GDP
Approximately 3.3%
Development of resilient
economic structure
Stimulating consumption

Protection of employment and support
q for households

Approximately 1.1%
Development of resilient
economic structure
Development of preventive
measures against infection
Stimulating consumption

Remaining impact of the December 2019 package Impact of new measures

II. Measures that protect employment and support businesses
Financial support measures mainly for SMEs (loans and credit guarantee through government financial
institutions), tax payment deferral and other measures. 7
Reference : Size of Measures (in detail)
(Approx., trillion yen)
Central and
local governments’
Fiscal Expenses Expenses Total Size
FILP loans
I. Measures to prevent the spread of the 2.5
infections build medical treatment 2.5 2.5
structures, and develop pharmaceuticals n/a

II. Protecting employment and keeping 21.1
30.8 88.8
business viable 9.7
III. Recovery of economic activities as a 2.8
next phase through public and private 3.3 8.5
cooperation 0.5

8.0
IV. Making economic structure resilient 10.2 15.7
2.3
V. Preparing for the future 1.5
(establishment of new contingency 1.5 1.5
funds) n/a

35.8*
Total 48.4 117.1
12.5**
(Note)
• 25.0 trillion yen is from the central government, and 18.6 trillion (out of 25.0 trillion) yen is included in supplementary budget for FY2020 (16.7 trillion yen for
General Account and 1.9 trillion yen for Special Accounts)
** 10.1 trillion (out of 12.5 trillion) yen is added in supplementary budget for FY2020.
8

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