The ruling Liberal Democratic Party drew up an outline Thursday for a new economic stimulus package worth more than 10 trillion yen aimed at realizing positive growth in the next fiscal year and putting the nation's economy back on a path to sustainable recovery within two years.
The total amount will exceed 18 trillion yen, if 7 trillion yen worth of income and corporate tax cuts Prime Minister Keizo Obuchi has promised to implement and other tax reductions are taken into account, LDP officials said.
The previous stimulus package, adopted in April, totaled 16.65 trillion yen. The LDP and the government are expected to formally endorse the package Monday and then submit it to an extra Diet session tentatively scheduled to convene Nov. 27.
The LDP's package calls for drastic stimulus measures to create job opportunities for 1 million people. Specifically, the LDP is calling for legislation to help promote job creation.
At the same time, it calls for revising existing labor-related laws to alleviate hardships caused for those who have lost their jobs by expanding the period of unemployment allowances and strengthening measures to help middle-aged people find jobs.
LDP policy affairs chief Yukihiko Ikeda said the package puts an emphasis on job creation and noted it is important to produce actual demand by implementing the measures.
To ease the ongoing credit crunch, the package calls for expanding the functions of the governmental Japan Development Bank by allowing JDB to provide firms with funds for redeeming maturing corporate bonds.
The LDP decided on a plan to make funds available at JDB and Hokkaido-Tohoku Development Finance Corp. for small and midsize companies that are finding it difficult to raise funds because of the credit crunch, according to party sources.