Tokyo: Japan unveiled a growth strategy for the next decade featuring plans to cut corporate tax to the level of other major nations, while creating more than $1353 billion in demand and 5 million jobs in sectors as healthcare and clean energy.
The government of Prime Minister Naoto Kan hopes that the plans will yield an average 2% real economic growth over the 10 years, but stopped short of presenting how to secure funds to implement them.
The strategy calls on the Bank of Japan to make “utmost efforts” to help the government end price falls possibly by March 2012, while stating that “excessive appreciation of the yen” should be averted through efforts to ensure stable inflation.
The mapping-out of the strategy was the first major task for Kan, who has been in office for only 10 days, and will be followed by mid- and long-term fiscal reform policies to be unveiled next week ahead of his trip to Canada to attend a set of summit meetings later this month and 11 July upper house election.
Even before assuming the premiership, former finance minister Kan had pressed for greater fiscal discipline amid a ballooning state debt and suggested that the 5 per cent sales tax be raised to 10%, while also calling for continued efforts to stimulate the economy, which has been emerging from its deepest postwar slump.
To boost Japanese companies’ international competitiveness, the government says it will gradually reduce the corporate tax rate from some 40% to the average level among other major economies, which is around 25%, although it did not specify a timeframe.
Japan will promote the export of its infrastructure technologies such as nuclear power generation and high-speed railways to mainly emerging Asian countries together with private-sector firms to help grow the market to $2168.08 billion, while aiming to create a free trade zone in the Asia-Pacific region.
It plans to expand combined research and development investment in the public and private sectors to 4% or more of gross domestic product through regulatory reforms and tax breaks.
Capitalizing on the popularity of Japanese animation, fashion and culture, it plans to earn more than $11 billion (1 trillion yen) through related output.
The government, led by the Democratic Party of Japan, seeks to create a market of more than $550.304 million and 1.4 million jobs in the green energy sector and establish a market worth more than $110 billion (10 trillion yen) for renewable energies by nurturing venture firms.