Japan’s Ishiba set to announce 21.9 trillion yen stimulus: NHK

JAPANESE Prime Minister Shigeru Ishiba is set to unveil a 21.9 trillion yen (S$190 billion) economic stimulus package to address a range of challenges from inflation to wage growth, according to public broadcaster NHK.

The package will include 13.9 trillion yen earmarked for spending from the general account, NHK said. The size is fractionally larger than last year’s 21.8 trillion yen fiscal spending package. Together with private sector spending, the impact of the package overall is expected to be around 39 trillion yen, NHK said.

The proposed plan is expected to be approved by the Cabinet on Friday (Nov 22), following Ishiba’s return from South America where he attended a series of summit meetings. While Ishiba was under political pressure to promise a hefty package of aid ahead of last month’s general election, the set of measures will add to the largest debt load for a developed economy.

The package is set to include support for sustained wage gains and cash handouts for low-income households, as well as investment into the semiconductor and artificial intelligence sector, according to an earlier draft of the plan seen by Bloomberg. The government also said it will resume subsidies for gas and electricity bills from January, to protect households from higher commodity prices.

Ishiba’s minority government has needed to make concessions to the smaller Democratic Party for the People (DPP), to ensure funding for the package will get passed in parliament.

The package will state that annual tax reform discussions for the next fiscal year will include raising the ceiling for tax-free income from 1.03 million yen, as proposed by the DPP, and will mention discussions on cutting petrol taxes, an initiative also proposed by the DPP, the party said on Wednesday. BLOOMBERG