Ruling bloc includes 20,000 yen handouts in election pledge
Prime Minister Shigeru Ishiba, center, meets with his Cabinet ministers at his office in Tokyo on June 10. (Takeshi Iwashita)
The ruling Liberal Democratic Party and its coalition partner, Komeito, have finalized a plan to provide cash to the public to ease the ongoing inflation burden, party officials said.
Under the proposal, every resident in Japan will receive a 20,000 yen ($138) cash handout, regardless of income level.
In addition, lower-income households that are exempt from the residential tax will receive an additional 20,000 yen.
The coalition aims to implement the measure by the end of the year, positioning it as a key policy pledge for the Upper House election in July.
The move is expected to be funded through a larger-than-expected surplus in tax revenue for the fiscal year that ended in March.
To finance the payouts, the government plans to draft a supplementary budget after the Upper House election.
This latest initiative revises an earlier plan from April to provide 50,000 yen per person, which was shelved amid public backlash for being an unsustainable populist policy.
By pledging to redistribute excess tax revenues and providing additional aid to low-income groups, the government hopes to garner broader public support.
The decision comes as opposition parties ramp up calls for a reduction in the consumption tax to alleviate household burdens.
However, LDP leaders have rejected the idea, citing concerns that it could undermine the country's social security system, which relies on the consumption tax of up to 10 percent.
The payout plan resurfaced as the ruling bloc sought an alternative economic relief policy ahead of the crucial summer election.
To ensure speedy distribution, the payments will primarily be made through bank accounts associated with the government My Number personal identification system.
Alternative delivery methods will be used for residents without linked accounts. Additional payments for tax-exempt households will be administered through local governments.
Without income-based restrictions, the proposal may face criticism for extending benefits to high-income earners.
Officials argue that they opted against means testing in favor of simplicity and swift implementation.
(This article was written by Haruka Suzuki and Shinkai Kawabe.)
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