Japan to begin work on relief package to counter rising fuel, food costs

Tokyo

JAPAN'S prime minister will order the government on Tuesday (Mar 29) to put together a fresh relief package by the end of April to cushion the economic blow from rising fuel and food costs, fanned by the Ukraine crisis.

The order will likely intensify debate within the government and the ruling coalition over the scale of spending and source of funding, with some lawmakers calling for a package of around 10 trillion yen (S$109.6 billion).

"We must respond flexibly to counter the impact on corporate activity and people's livelihood" from the Ukraine war-driven spike in raw material prices, Prime Minister Fumio Kishida told Parliament on Monday, announcing his plan to make the order.

Kishida is under pressure, including from his party's ruling coalition partner Komeito, to compile an extra budget, instead of relying solely on reserves set aside to cope with pandemic-related spending.

"We haven't told the prime minister the extra budget must pass through the current parliament session, though that is what we have in mind," Komeito executive Keiichi Ishii told reporters after a meeting with Kishida.

The prime minister offered few clues on whether an extra budget would be considered, saying that the priority was to tap money from Covid-19 reserves.

Komeito presented Kishida with a proposal on the package that called for expanding subsidies to industries hit by rising fuel costs, cutting the petrol tax as well as steps to mitigate the impact of rising grain prices.

Rising fuel and raw material prices have dealt an additional blow to Japan's economy, which has lagged other countries in making a sustained recovery from the impact of the pandemic. REUTERS