Prime Minister Shinzo Abe approved Thursday a fresh economic stimulus package worth more than ¥20 trillion to help Japan out of chronic deflation.
During a meeting with his economic revival minister, Akira Amari, Abe was briefed on details of the emergency package, which will be formally approved by the Cabinet on Friday.
The prime minister instructed Amari to make the stimulus measures “easy for the public to understand” and ensure they will be effective enough to help the new administration achieve its goal of revitalizing the world’s third-biggest economy, Amari told reporters after the meeting.
The government and Abe’s Liberal Democratic Party, as well as coalition partner New Komeito, have worked on the stimulus measures since the LDP won the general election in December.
The central government will spend ¥10.3 trillion for the package, which is worth over ¥20 trillion, also including costs to be covered by local governments and the private sector.
Abe also said Thursday that the government will spend over ¥19 trillion for reconstruction of areas devastated by the March 2011 earthquake and tsunami, during five years through fiscal 2015, scrapping a budget plan created by the previous administration led by the Democratic Party of Japan.
Abe’s remarks at a meeting of a government panel came after reconstruction minister Takumi Nemoto met with Yoshihiro Murai, governor of Miyagi, one of the prefectures worst hit by the natural disaster, earlier in the day. After meeting Murai, Nemoto said the government will finance all necessary work, regardless of the earlier spending plan.
Japan had already earmarked about ¥17 trillion for reconstruction by the time it drew up the initial fiscal 2012 budget.
The ¥19 trillion threshold is expected to be topped soon as Abe has pledged to accelerate relief work in the devastated areas with the forthcoming extra budget for the current fiscal year and initial budget for fiscal 2013, which will start April 1.
LDP may hike income tax
The Liberal Democratic Party administration may raise the maximum rate for income tax to 45 percent from 40 percent for those who earn more than ¥30 million or ¥40 million annually, sources said Thursday.
While the previous government, led by the Democratic Party of Japan, was initially eager to raise income taxes for the wealthy in January 2015, the LDP Cabinet unveiled Dec. 26 is considering putting it off by one year, the sources said.