Japan to increase social spending to boost economy

November 27, 2015 07:36
Shinzo Abe says 'inclusion' is the theme of the second phase of his economic growth program. Photo: Bloomberg

Japanese Prime Minister Shinzo Abe said he will increase spending on social programs and raise the minimum wage as he tries to jump-start the flagging economy before an election next summer, The Wall Street Journal reported.

Abe said Thursday the government will give 30,000 yen in cash (US$240) to each of Japan's 10 million elderly poor, whose numbers are on the rise.

To ease a shortage of workers, the government plans to make working easier for people with children or elderly parents who need care by building child-care and elderly-care facilities.

The spending will be part of a stimulus package expected to cost at least 3 trillion yen.

Abe hopes to revive an economy that has slipped into recession for the second time in two years, heightening skepticism about whether Abenomics will ultimately succeed in generating sustainable growth.

He announced a “second phase” of the growth program in September, offering few details but pledging to expand the economy by 20 percent by 2020, a target many economists dismissed as unrealistic.

The measures outlined Thursday, though modest in scope, reflect a new focus for Abenomics, which has been criticized for benefiting mostly big businesses while average Japanese struggle to keep up.

Abe said the theme of the second phase is “inclusion”, while the goal is to help more people contribute to and benefit from economic activity.

The details of the stimulus package will be finalized by the middle of next month and submitted to parliament in January. 

-- Contact us at [email protected]