TOKYO — Japan plans to send a cash handout of 100,000 yen ($930) to every resident, regardless of income, to lessen the economic blow from the coronavirus pandemic after an earlier income support scheme met with resistance.
The government withdrew its proposal to give 300,000 yen to qualified households that had lost income, which was criticized even by some in the ruling coalition as too limited and complicated.
“We need a measure that will pay benefits to more people,” Prime Minister Shinzo Abe said Thursday night in a meeting of the government’s coronavirus task force.
The decision came as Abe extended emergency declarations nationwide. The new cash handout proposal will cost three times as much as the earlier, limited income support, which would have entailed proving economic hardship as a result of coronavirus outbreak.
Abe’s shift came followed came at the urging of Komeito, the smaller party in the Liberal Democratic Party-led ruling coalition, which pointed to the poor public reception of the earlier plan and even threatened to switch its support to a competing opposition proposal, according to a source familiar with the situation.
The government had considered doing both, sending the 300,000 yen to the hardest-hit households first and the smaller universal payments later. But junior coalition partner Komeito, which had advocated for the latter plan, urged Tokyo to focus its resources on the broader measure.
While some in Abe’s LDP had also argued that universal payments were necessary, the first sign of a shift in the government’s position was a comment Tuesday from LDP Secretary General Toshihiro Nikai.
“There are urgent calls for proposals such as 100,000 yen payments to everyone,” Nikai said. “I strongly urge the government to take action quickly on what it can do.”
After these comments, Komeito pressed harder for its proposal. Party leader Natsuo Yamaguchi held an impromptu meeting on the matter with Abe on Wednesday.
Yamaguchi warned that the situation was “critical” and that “the government charging ahead with 300,000 yen payments has badly damaged public opinion of the cabinet,” according to a senior Komeito official.
Distributing 100,000 yen to every citizen will cost over 12 trillion yen, or $111 billion, estimates show, compared with an estimated 4 trillion yen for the earlier plan.
The change requires a major upward revision to the 16.8 trillion yen supplementary budget that was slated to go to parliament next week. The government aims to submit the new spending plan as early as April 27.