Stimulus plan to include ¥5 trillion in spending

Kyodo News

The government and ruling coalition agreed Wednesday to set fiscal spending at ¥5 trillion for an additional economic stimulus package, coalition sources said.

They also agreed to replace earlier proposed tax credits worth ¥2 trillion with cash benefit payments through municipal offices as the key feature of the package, the sources said.

The government has been negotiating with the Liberal Democratic Party-New Komeito ruling bloc to compile the package Thursday, following a ¥1.8 trillion supplementary budget enacted earlier this month for fiscal 2008 ending next March.

The LDP proposed the cash benefit payments as a measure to stimulate consumption more effectively than tax credits and New Komeito accepted the proposal, the sources said.

The additional package will also include more expressway toll cuts as well as assistance to small and midsize enterprises that should exceed some ¥400 billion incorporated into the extra budget, they said.