Prime Minister Shinzo Abe on Tuesday convened the first meeting of the Economic Revitalization Headquarters, endorsing the outline of the government’s emergency stimulus package totaling some ¥20 trillion in a bid to steer Japan out of deflation and prop up the economy with massive public works spending.
The package includes public-private initiatives and spending by local governments. The central government will compile a ¥13.1 trillion supplementary budget for fiscal 2012, which ends in March, to finance the package, with ¥10.3 trillion of that to be specifically used for fresh stimulus spending.
The Economic Revitalization Headquarters, headed by Abe and one of the main bodies to lead his economic agenda, endorsed pillars of the stimulus plan, including accelerated reconstruction of the Tohoku region, bolstered disaster prevention measures and fiscal policies to combat the nation’s prolonged deflation and high yen.
The body includes all Cabinet ministers, with decision-making power consolidated under Abe.
“We have to implement drastic monetary easing policies and growth strategies to fight chronic deflation and the strong yen,” Abe said at the start of the meeting.
The stimulus package is expected to be finalized Friday, and the supplementary budget is slated to be endorsed by the Cabinet on Jan. 15.
Under the stimulus plan, the Liberal Democratic Party-New Komeito ruling bloc is expected to earmark about ¥4 trillion to ¥5 trillion for public works, in an about-face from the policies led by the Democratic Party of Japan, which cut more than 30 percent of the public works budget. The DPJ was ousted by the LDP in the Dec. 16 Lower House poll.
Tuesday’s meeting also approved the launch of a panel for boosting industrial competitiveness, which will discuss growth strategies.
The nine-member panel, chaired by Abe, includes Keio University professor Heizo Takenaka, Rakuten CEO Hiroshi Mikitani and Lawson CEO Takeshi Niinami. Takenaka served as economic and fiscal policy minister from 2001 through 2005 under then-LDP Prime Minister Junichiro Koizumi.
Abe was highly intent on appointing Takenaka, Chief Cabinet Secretary Yoshihide Suga told reporters Tuesday, adding: “We want to utilize Mr. Takenaka’s expertise. He has international perspectives and has strong ability to analyze Japan’s current economic situation.”
Abe said the government will compile “drastic growth strategies” by June based on discussions by experts.