FACTBOX-Japan opposition's economic stimulus plan

Published: 14 Apr 2009 01:57:41 PST

April 14 - Japan's main opposition Democratic Party, aiming to topple Prime Minister Taro Aso's government in an election due by October, has set out an economic stimulus plan with 20 trillion yen ($200 billion) in spending over two years.

Prime Minister Taro Aso's government is proposing a package with a record 15.4 trillion in new spending, or nearly 3 percent of GDP. The Democrats have blasted the government's measures as temporary fixes, while hailing their own plans as structural changes that would improve livelihoods in the longer-term.

The party had looked poised to win the election but the outlook has been clouded after an aide to party leader Ichiro Ozawa was arrested and charged in a fundraising scandal last month. Aso's public support rates have come off rock-bottom levels since the scandal broke.

The following are key aspects of the Democrats' package:

TOTAL SPENDING AND FUNDING

-- Spending would add up to over 20 trillion yen over two years.

-- Money would come from cutting government spending in areas such as public work projects, government-linked agencies and personnel costs for civil servants.

-- Spending for the current year to March 2010 would come from reserves, including those in a special account for fiscal investment and loan programmes, and in another special account for foreign exchange funds.

-- Some new issuance of government bonds may also be inevitable.

SUPPORT FOR FAMILIES

-- Paying out 26,000 yen per month for children until they graduate from junior high school.

-- Scrapping highway tolls, except for those charged for highways in Tokyo and Osaka, the two main cities.

-- Ending provisional taxes and relieving local governments of expenses for public works projects run by the central government. Tax cuts would amount to 2.5 trillion yen.

-- Cutting the corporate tax for small- and medium-sized companies to 11 percent.

ENVIRONMENT

-- Subsidising half the cost of installing solar energy panels in homes.

-- Promoting purchases of environmentally cars by paying up to 300,000 yen for around 2 million cars.

HEALTHCARE, SOCIAL SAFETY NET

-- Making employment insurance applicable to all workers and raising the government's contribution to employment insurance payouts to 25 percent from the current 13.75 percent.

-- Exempting children from medical costs until they graduate from junior high school.

-- Improving working conditions for medical workers to alleviate shortage of doctors and nurses.

BOOSTING CONSUMER SPENDING, INDUSTRIES, JOBS

-- Subsidising purchases of environmentally friendly home appliances and equipment for digital terrestrial broadcasting.

-- Paying out subsidies for those working in the farming, forestry and fishing sectors.

-- Providing 100,000 yen in monthly allowance for those ineligible for unemployment insurance but in vocational training.

BREAKDOWN

The following is a breakdown of the planned spending (in trillion yen):

Steps for households 14.1

Steps for environment 1.6

Steps for healthcare, social safety net 4.5

Steps for consumer spending, industries, jobs 1.0

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Total 21.2