On Wednesday, Japan’s ruling coalition reached an agreement with a key opposition party on the draft of an economic stimulus package, overcoming a significant hurdle for the $87 billion plan aimed at alleviating the impact of rising prices on households.
The agreement, made between the Liberal Democratic Party (LDP), its coalition partner Komeito, and the Democratic Party for the People (DPP), paves the way for the package to likely be approved by Prime Minister Shigeru Ishiba’s cabinet on Friday.
Following the October 27 election, which left the LDP and Komeito in control of a fragile minority government, the coalition now requires DPP’s cooperation. As part of the agreement, the LDP and Komeito have agreed to prioritize some of DPP’s key policy proposals, such as increasing the basic tax-free income allowance and reducing the gasoline tax, according to a DPP spokesperson.
The stimulus package will also include direct payments to low-income households, such as 30,000 yen ($193) for those exempt from residential taxes, and 20,000 yen per child for households with children, sources familiar with the matter have told Reuters.
Next month, parliament will begin discussions on a supplementary budget to finance the package, which is said to be valued at approximately 13.5 trillion yen ($87 billion).
