Japan's Prime Minister Taro Aso today unveiled a $ 277 bn stimulus package for Asia's largest economy to weather the global economic crisis, signalling he would hold off on high-risk elections.
Aso, trailing in polls and under pressure from the opposition to call snap elections, instead pressed parliament for quick approval of the 26.9 tn yen ($ 277 bn ) plan, including five trillion yen in new spending.
With the economy teetering on recession, the package's highlight is sending back a total of two trillion yen ($20.3 bn) to all households.
"The global financial crisis is a once-in-a-century event," Aso told a nationally televised news conference.
"An overwhelming majority of people put importance on policies, especially economic measures, rather than political affairs," he said.
The package includes cuts in tolls on expressways, tax breaks for housing loans and capital gains, along with support for child care, elderly care and regional economies.
Aso also pledged help for the growing number of young Japanese without steady jobs by giving businesses incentives to provide stable work to some 6,00,000 people.
"In this kind of situation, we need to relieve people's insecurities. We should not be fearful of the violent storm, nor should we just stand and let the typhoon blow us away," Aso said.
But Credit Suisse economist Hiromichi Shirakawa doubted the package could stop Japan's slowdown, saying that unemployment would likely rise as US and other countries' demand for Japanese exports slumps.
"With tax breaks in a climate of heightened employment insecurity, we expect only limited stimulus effects on individual consumption and housing investment," he wrote in a report.
