Employment task force eyed to bolster economic recovery

TOKYO, July 17 Kyodo -
The government's key economic panel agreed Friday to set up a task force on
additional employment steps so as to reinforce the nation's economic recovery
ahead of the upcoming general election.
While noting that stimulus measures already implemented by the government have
helped to halt the sharp downturn in the economy, the panel agreed that the
government should do more to support employment, especially for young people,
by launching a cross-ministerial task force, said Yoshimasa Hayashi, economic
and fiscal policy minister.
The Council on Economic and Fiscal Policy also confirmed during its meeting
that the government needs to thoroughly implement its stimulus measures
compiled in April to prevent any risk arising from a possible political vacuum
as Prime Minister Taro Aso plans to dissolve the House of Representatives next
week for a general election in late August.
''We are achieving the priority task of halting the sharp economic downturn
thanks to a series of economic stimulus measures as well as private-sector
efforts,'' Hayashi quoted Aso as saying at the panel meeting.
Hayashi said at a press conference after the meeting that Aso also told panel
members to keep a tight grip when implementing stimulus measures, even though
he is dissolving the lower house.
''We will consider details (of the task force) from now on,'' Hayashi said,
adding that the government will also strive hard to publicize more its economic
pump-priming measures so more people can use and benefit from them.
The panel's private-sector members said these moves are necessary to help the
Japanese economy shift smoothly into the phase of a private sector-led recovery
from the current public sector-led one.
Among several risk factors that could dampen the recent economic improvement,
the members also warned that a sharp increase in job losses, especially among
young people and nonregular workers, could develop into a vicious cycle by
damaging consumption and investment.
Other risk factors include further turbulence in financial markets, prolonged
economic stagnation in the United States and Europe, and a possible
deflationary spiral in Japan, they said.
As an example of the effects of stimulus measures taken so far, the government
said domestic sales of new cars increased in June from the previous month on a
seasonally adjusted basis for the third consecutive month from April in line
with the government's tax breaks for environmentally friendly cars.
About 90,000 jobs are also estimated to have been created thanks to stimulus
measures such as subsidies to support employment at smaller companies as well
as enhanced free job training, the government said.
The council is a key economic policy-setting panel chaired by the prime
minister, with members including key economic Cabinet members, Bank of Japan
Governor Masaaki Shirakawa, and four private-sector members with business and
academic backgrounds, including Fujio Cho, chairman of Toyota Motor Corp.
Friday's meeting could be the last gathering of the panel as the main
opposition Democratic Party of Japan, which is seen as having a good chance of
wresting power from the ruling coalition in the upcoming general election, has
said it will scrap the council.
Although the panel once drew attention as a pivotal venue for structural reform
pushed forward by former Prime Minister Junichiro Koizumi, its presence has
dimmed recently as the ruling parties and bureaucrats regained influence on the
policymaking process after Koizumi left office in 2006.
==Kyodo