The Abe administration will aim to double labor productivity growth to 2 percent in the three years through 2020 from 0.9 percent, the average for the five years through 2015, according to informed sources.

The government is set to include the target in a package of policy measures it plans to adopt Friday to help achieve a “productivity revolution,” an initiative designed to ensure sustainable wage growth and overcome deflation, the sources said.

The policy package is also expected to call for increasing corporate capital spending by 10 percent in fiscal 2020 from the fiscal 2016 level and achieving wage growth of at least 3 percent every year during the three-year intensive reform period through 2020.

The administration is set to pledge that it will utilize all policy measures to improve productivity, including the greater use of big data and artificial intelligence technology.

The package will include plans to reduce corporate tax burdens to internationally competitive levels for companies actively boosting their wages and capital expenditures.

Corporate tax burdens on companies making efforts to increase wages and improve productivity by utilizing AI and internet of things-related technologies will be reduced to levels that can help them survive international competition, the sources said.

Corporate tax incentives will likely be given to small companies increasing wages. The government is also slated to offer fixed asset tax cuts and subsidies to small companies.

The government will identify the next 10 years as an intensive period for promoting smooth business succession among small companies, by expanding the scope of an inheritance tax moratorium.

It will encourage companies to use their cash and deposits for capital spending and investment in human resource development by reviewing corporate governance guidelines before next year’s shareholder season peaks in June, the sources said.

Separate from the policy package, the Defense Ministry will create a program to pay benefits to companies hiring Self-Defense Forces reservists, seeking to address understaffing issues related to call-ups of such personnel, the sources said.

The envisioned program is aimed at making it easier for companies to hire reservists and ready reservists, who work in the private sector in normal times and serve in the SDF in emergencies and natural disasters, the sources said.

Ready reservists are more highly trained than reservists.

Under the program, the ministry would pay some ¥30,000 a day to companies so that they can hire substitute staff when employees are absent from work after they are called up for SDF service or get injured on duty or during training, the sources said.

The ministry plans to include expenses for the program in a draft budget for the fiscal year from next April, and also submit revisions to the SDF law during next year’s ordinary Diet session, the sources said.

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