To help Japan’s ailing manufacturing firms in their restructuring efforts, an advisory panel of government and business leaders endorsed a set of proposals Thursday that include tax cuts to dispose of excess facilities and extended benefits for the unemployed.

The proposals, compiled by the Japan Federation of Economic Organizations (Keidanren) and submitted to Thursday’s Competitiveness Commission meeting, are expected to help create a package of measures to reinvigorate the Japanese industry in mid-June, with passage of bills as early as possible.

“We would like to reflect on discussions at the commission’s meeting today as much as possible in the planned package of measures to be announced,” Prime Minister Keizo Obuchi told the meeting.

The private sector plays a leading role in reforming the nation’s manufacturing industry, he said, urging them to help create more jobs in accordance with the proposal.

The proposals call especially for a reduction of taxes on disposal of excess facilities, real estate transactions and creation of a system that promotes early depreciation of unneeded plants and equipment.

They also point out that regulations on use of land should be more flexible so companies can turn their industrial sites into residential areas.

Another key proposal urges focus on the unemployment problem and encourages the government to extend the period for unemployment benefits and promote job training systems to help people forced out of work by corporate restructuring to get new jobs.

Chief Cabinet Secretary Hiromu Nonaka stressed that solving the unemployment issue is the government’s most important and urgent task, but added that the state should draw a line between people who choose to be unemployed and are not earnestly seeking work and people who are willing to work but unable to find jobs because of their age or lack of skills.

“We should not simply extend the period for unemployment benefits for all unemployed people,” Nonaka said. “We must look into the cases of the unemployed carefully.”

To better facilitate corporate reorganization reforms, the proposals recommend easing the tax burden on stock swaps and urge the government to introduce a consolidated tax payment system as early as possible.

Speaking at a news conference after the panel’s meeting, Takashi Imai, chairman of Keidanren, said Japan needs to change various legal systems to make Japanese companies more competitive in the world market, pointing out that more and more mergers and acquisitions are taking place globally.

“Companies cannot flexibly reorganize themselves under the current Commercial Code and tax systems of our country,” Imai said. “We must remove obstacles to create an effective management system.”

Panel members also recommended that bank and antimonopoly laws be revised to encourage creditor banks to swap debts for shares in their corporate borrowers.

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