Japan looks to households to boost demand

Ulhas Joglekar ulhasj at bom4.vsnl.net.in
Mon Apr 24 18:19:08 PDT 2000


Monday 24 April 2000

Japan looks to households to boost demand TOKYO: Japan's ruling party will try to spur economic growth by reducing inheritance taxes and giving workers more free time, the party's top policy maker was quoted Sunday as saying. Shizuka Kamei said the Liberal Democratic Party wants to raise the amount of inheritance money excluded from taxation from 600,000 yen ($5,673) to 10 million yen ($94,553), according to Kyodo News agency. Kamei also pledged to give company employees more holidays so they will have more time to spend money, Kyodo said. The official was speaking in an interview on Fuji TV. The report did not say how Kamei planned to get companies to give more vacation time to employees, and LDP officials could not be reached for comment at their headquarters on Sunday. Changes to the tax system or the government-designated national holidays would have to be approved by Parliament, in which the LDP has a majority. The Japanese government in recent years has borrowed a record amount of money for spending programs designed to pull the nation's economy out of its worst slump in decades. Such spending has put Japan among the world's most indebted nations, prompting the government to look for other ways to stimulate economic growth. Kamei reasoned that parents would be able to transfer more money to their children if a larger portion of their wealth is tax-exempt, Kyodo said. Less time at work, meanwhile, would give Japanese more time to spend some of the 1.3 quadrillion yen ($12.3 trillion) locked up in savings accounts, Kamei reportedly said. Unlike many public holidays in the United States, Japan's 14 annual national holidays do not necessarily fall adjacent to weekends. But this year, the government moved two holidays next to weekends to allow people to take long vacations in hopes they would spend more money on travel. "New domestic demand cannot be created if the conventional life pattern and sense of life remain unchanged," Kyodo quoted Kamei as saying. "Economic structural reform is life-structure reform." (AP) For reprint rights: Times Syndication Service
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