TOKYO (Reuters – Japan’s lower chamber of parliament passed the largest ever extra budget for $316 billion on Wednesday. It is intended to stimulate a recovery from COVID-19.

Fumio Kinio, the new Prime Minister, presented the challenges of trying to balance heavy spending for the recovery and managing the burdensome industrial debt.

Kishida’s government places its emphasis on growth and not fiscal reform. It targets wealth-distribution for citizens in his new capitalism, which is aimed to generate a vicious cycle of wage rises and economic expansion.

This fiscal year’s extra spending of 36 trillion yen ($316billion) will partly be funded by 22 trillion additional government bonds.

A supplementary budget is followed by the compiling of an annual state budget, fiscal 2022/23. This will take place later in the month. Kishida promised to ensure that the world’s third-largest economic sector is kept afloat by implementing seamless spending in a period of 16 months.

This budget included controversial payouts in excess of 100,000 yen per family with children. But central and local governments are still negotiating over payment options – whether they want lump-sum cash payments, split payments, or cash-and-shopping vouchers.

This budget will also promote tourism and corporate financing, boost growth in green and digital industries, and strengthen semiconductor factories and supply chain.

Last month, Kishida’s Cabinet unveiled the economic package of 79 trillion Japanese yen with record spending of 55.7 trillion yen.

Due to the solid majority held by Kishida’s ruling bloc in each chamber, it is likely that the additional budget bill will pass through parliament’s upper House later this month.

($1 = 113.7600 yen)