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Friday, Oct. 26, 2012
¥400 billion in stimulus on the way
Pump-priming ordered as demand from Tohoku recedes
A stimulus package worth more than ¥400 billion is being prepared to spur the economy as the recovery from the March 2011 earthquake and tsunami slows, government sources said.
The policy package, which will be the first in a series of emergency measures, originally started out at ¥200 billion but was doubled to revive the flagging economy. The Cabinet of Prime Minister Yoshihiko Noda is expected to approve it Friday.
The sources said the stimulus package will focus in part on supporting smaller businesses affected by the natural disasters and on promoting research on artificially derived multipurpose stem cells, a technology that won Kyoto University professor Shinya Yamanaka this year's Nobel Prize in physiology or medicine with British researcher John Gurdon.
The government plans to tap reserve funds from the fiscal 2012 budget to front-load some of the emergency steps.
The measures are expected to be compiled in full by the end of November, assuming Noda's Democratic Party of Japan breaks the political deadlock preventing the Diet from enacting a bill for deficit-covering bonds needed to secure sufficient funding for the year.
Economic growth has slowed significantly since domestic demand apparently peaked for disaster reconstruction. Exports and production are also falling from the global downturn being driven by the sovereign debt crisis in Europe.
Of the ¥400 billion, ¥100 billion will be allocated to a set of measures centering on the environment, medicine, agriculture and fisheries, the sources said.
The programs included in the package will promote fuel-cell batteries for households and efforts by farmers and fishermen to process and distribute products.
The government will also bolster a subsidy program by ¥80 billion to support small and midsize firms that teamed up to rebuild businesses together in disaster-hit areas.
It will also expand a program aimed at encouraging companies to invest in Fukushima Prefecture, home of the meltdown-stricken Fukushima No. 1 nuclear plant, by ¥40 billion.
It will also promote the renovation of school buildings and guardrails along roads used by children when walking to school.