Japan economic package to deal with epidemic to top 30 tril. yen

The Japanese government and the ruling coalition are considering an emergency economic package totaling more than 30 trillion yen ($270 billion) to cushion the impact of the coronavirus outbreak, sources close to the matter said Sunday.

The expected sum includes spending by the private sector. The spending by the government for the planned stimulus is likely to surpass 15 trillion yen, the sum the government spent in an economic package in the wake of the global financial crisis sparked by the 2008 failure of Lehman Brothers Holdings Inc.

The new package could involve providing cash and gift certificates to the public, as well as subsidizing the people with part of their travel expenses, the sources said.

It would also facilitate financing for small and midsize companies so they can continue business and maintain employment.

The government and the coalition, which comprises the Liberal Democratic Party and its junior partner Komeito, are considering deficit-covering bonds as a source for the package, which they plan to finalize possibly in early April, according to the sources.

The two sides are expected to start substantial negotiations for the package after the Diet passes the initial budget for fiscal 2020 in late March.

The government and the coalition are unlikely to reduce the consumption tax from the current 10 percent because tax revenues are a major source for rising social security spending amid the rapid aging of the nation's population.

Some LDP members are calling for lowering the tax rate to 5 percent to stimulate personal spending and bolster the economy, an idea backed by some opposition lawmakers.

(Japanese Prime Minister Shinzo Abe speaks on March 21, 2020, during a meeting in Tokyo on emergency economic measures to deal with the new coronavirus)