Photo/IllutrationPrime Minister Shinzo Abe speaks at the Council on Economic and Fiscal Policy at the prime minister’s office on Dec. 5. (Takeshi Iwashita)

The government announced an economic measures package worth 26 trillion yen ($239 billion), a number that elicited praise from election-minded politicians but criticism from those advocating fiscal responsibility.

The central and local governments will cover around half of the funding for the package, which was approved at an extraordinary Cabinet meeting on Dec. 5.

The three main pillars of the package are: recovery and reconstruction from natural disasters; preparation for an economic downturn caused by trade friction and other overseas developments; and providing support to overcome possible economic doldrums after the 2020 Tokyo Olympic and Paralympic Games.

The spending is also aimed at modernizing public schools and supporting those who suffered under the “employment ice age.”

“We will implement full-scale preparations as some risk factors concerning the future of the economy are coming into sight mainly due to overseas events,” Prime Minister Shinzo Abe said at the Council on Economic and Fiscal Policy on Dec. 5.

Abe said the projects in the package will be sorted out in the fiscal 2019 supplementary budget, which will be finalized by the end of December, as well as the initial budget for fiscal 2020.

The economic measures package is the first such package in three years, as well as the fifth and second largest announced by the second Abe administration.

The government said a large economic measures package was needed to prepare for uncertainties in the future.

For 13.2 trillion yen of the total, the central government will cover 7.6 trillion yen through tax revenue and other means, while local governments and loans targeting the private sector will provide 5.6 trillion yen.

The remainder of the 26 trillion yen will be supplied by the private sector.

One key project is the distribution of IT terminals, such as personal computers and tablets, to each child in elementary and junior high school by fiscal 2023.

The government also wants to create an environment that improves productivity of small- and medium-sized enterprises while supporting people who have struggled to find full-time employment after companies turned to part-timers and temporary staff workers.

However, the package is loaded with many projects that appear to have been thrown in under an “anything goes” style by policymakers who wanted to make the package as big as possible.

Other projects include: public works spending for roads and airports; promoting small- and medium-sized companies and agriculture; research and development; parenting support; and implementing information technology in education.

The central government in fiscal 2019 has already taken temporary and special measures to prevent a decline in personal spending following the increase in the consumption tax rate from 8 percent to 10 percent in October. These measures include rewarding customers who use cashless payment systems.

For that reason, some in the government raised doubts about issuing the additional economic package.

A decrease in corporate tax revenue is expected to push government income from domestic sources in fiscal 2019 to below initial estimates.

The government is also in the final phase of drafting the budget for next fiscal year, which will likely exceed 100 trillion yen.

The Abe administration has shown no signs of reducing the growing annual government expenditures.

“It has been conventional for the sum of the supplementary budget to go up as politicians request,” said Takeo Doi, a professor at Keio University who specializes in finance.

Doi said the latest package indicates that “the government is returning to the economic stimulus measures issued in the 1990s, which later proved ineffective.”

But high-ranking members of the ruling Liberal Democratic Party and junior coalition partner Komeito praised the economic package as a “present” that could increase their chances in a snap general election expected in autumn or later next year.

Some ruling coalition members had insisted that the share of government funding for the economic package had to reach “at least the 10-trillion-yen level,” according to sources.

The current term for Lower House members hit the halfway point in October. Many of them expect Abe to dissolve the Diet chamber and call a snap election next year.

Abe and other top administration officials have repeatedly emphasized the importance of maintaining economic viability beyond the 2020 Tokyo Games.

Preventing a post-Olympic economic downturn would be beneficial for ruling coalition lawmakers seeking re-election.

“Next year, anything could happen at any time,” a top official of Komeito said. “We are positioning ourselves for that, and this economic package is part of it.”

However, at least one LDP member was enraged at the lack of fiscal restraint.

“It’s not like we are selling bananas at a bargain price,” the member fumed.

(This article was written by Hideki Kitami, Kazuki Kimura and Keishi Nishimura.)