Japan`s fresh stimulus plan to be worth up to 25 tril. yen

TOKYO, Oct. 24 Kyodo -
(EDS: RECASTING WITH FRESH INFO)
Japan's additional economic stimulus package featuring steps to protect
people's livelihoods from the effects of the financial crisis will be worth up
to 25 trillion yen, ruling party sources said Thursday.

The size of the package emerged after the ruling coalition parties earlier in
the day presented the outline of the package to Prime Minister Taro Aso.
The new set of policy measures is expected to be finalized next week following
examinations by the government and the ruling bloc. The package is projected to
involve trillions of yen in state funding.
In the outline, the Liberal Democratic Party headed by Aso and its coalition
partner the New Komeito party listed ways to support household budgets, secure
employment, stabilize the nation's financial system, aid faltering small
businesses, boost the nation's growth potential and revitalize regional
economies.
The fresh measures will follow the first stimulus package worth about 11.7
trillion yen, which was unveiled Aug. 29 before the U.S.-triggered credit
crisis deteriorated further.
As Aso has instructed the ruling parties and the government to try to avoid
issuing deficit-covering bonds in view of the nation's tight fiscal conditions,
lawmakers are considering tapping into the reserves of the country's special
account budgets.
Specifically, the ruling parties envision tax cuts of around 2 trillion yen in
fiscal 2008, the establishment of a fund to boost regional employment, the
lowering premium payments for the national unemployment insurance program and
incentives for companies to hire non-regular, part-time workers as full-time
employees.
As ways to revitalize regional economies, the package also includes new local
grants to finance public works projects in the fields of agriculture and
environmental protection, financial support for farmers affected by the
government policy of reducing rice acreages and reductions in expressway tolls.
The parties also call for the expansion of a credit guarantee system for small
firms with cash-flow problems, temporary cuts in corporate tax levied on small
companies and the extension of tax breaks for people paying housing loans.
They also reached an accord to revive a law to facilitate an injection of
public funds into regional financial institutions in order to prevent a credit
crunch.
The ruling coalition made it clear that the government will work out a
medium-term tax reform program by the end of this year to secure stable
financial resources to cover ballooning social security costs caused by the
rapid aging of Japanese society.
After receiving the outline, Aso told reporters that he ordered the government
and the ruling coalition to make the scale of tax breaks for people paying
mortgages the largest on record and to provide 1 trillion yen from road-related
tax revenues to local municipalities.
The premier also said the medium-term tax reform program should include more
details.
==Kyodo