The ruling Liberal Democratic Party put the final touches April 23 to the 16 trillion yen worth of economic stimulus measures to be endorsed by the government today, which will include about 10-trillion yen in "real-water" measures that require direct government outlays.
The package will feature an additional 2 trillion yen in temporary income and residential tax cuts and 260 billion yen in expanded tax deductions, according to LDP officials. But Prime Minister Ryutaro Hashimoto was still having trouble securing Cabinet consensus on how to revise the Fiscal Structural Reform Law, which binds the government to an austere fiscal policy, due to resistance from Health and Welfare Minister Junichiro Koizumi.
The law stipulates that deficit-covering bond issuances need to be reduced every year so that by fiscal 2003 the government does not issue any such bonds. It also places spending caps on key expenditure areas.