Provisional Translation

Immediate Economic Measures for Extending
Virtuous Cycles toLocal Economies

December 27, 2014

Table of Contents
Chapter 1 Current conditions of economy and basic concept of economic
measures・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1
I. Current conditions of economy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1
II. Basic concept of economic measures・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・1
Chapter 2 Specific Measures・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・2
I. Support for consumers and business operators affected by the current
economic state・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・2
1. Support for people, including development of living environments・・・・・・・・2(1) Stimulation of consumption in regions and provision of livelihood
support・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・2(2) Support for child-rearing, and encouragement of women’s participation・・2(3) Enhancement of a sense of security in life・・・・・・・・・・・・・・・・・・・・・・・・・・・3
2. Support for business operators・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・3
3. Measures to save energy cost・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・4(1) Promotion of energy saving and renewable energy・・・・・・・・・・・・・・・・・・・・4(2) Measures to mitigate the influence of energy prices・・・・・・・・・・・・・・・・・・・5(3) Stable supply of resources and energy・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・5
4. Measures to invigorate the housing market・・・・・・・・・・・・・・・・・・・・・・・・・・・6
II. Reinvigoration of regions through effective initiatives for addressing
structural challenges they are faced with・・・・・・・・・・・・・・・・・・・・・・・・・・・・6
1. Precedent implementation of the comprehensive strategy for vitalization of
towns, people, and jobs・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・6
2. Invigoration of the economy mainly through promoting industry in regions 7(1) Development of mechanisms for facilitating creation of new industries andreform of existing ones in regions・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・7(2) Support for businesses and industries helpful to invigorating local economies ・・・8
(3) Support for regions for promoting their appeal・・・・・・・・・・・・・・・・・・・・・・・9(4) Promotion of liquidity of the human capital market, and development of
housing environments, etc. ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・10

3. Action to address individual challenges of regions・・・・・・・・・・・・・・・・・・・・11
III. Action to address disasters and crises, including accelerated recovery andreconstruction after disasters・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・11
1. Enhanced disaster recovery and response・・・・・・・・・・・・・・・・・・・・・・・・・・・11(1) Recovery from landslides, typhoons, and other large-scale disasters・・・・・12(2) Immediate disaster prevention responses for regions and facilities withgreater natural disaster risk・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・12(3) Construction of information and logistics systems resilient to disasters・・・13(4) Enhancement of earthquake resistance performance of schools and otherfacilities・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・13
2. Acceleration of reconstruction, etc. ・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・14(1) Recovery and reconstruction of areas damaged by the Great East Japan
Earthquake・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・14(2) Accelerated action to cope with the nuclear plant accident・・・・・・・・・・・・・15(3) Enhanced nuclear emergency preparedness・・・・・・・・・・・・・・・・・・・・・・・・・15
3. Realization of a safe and secure society・・・・・・・・・・・・・・・・・・・・・・・・・･・・・15(1) Ensuring well-maintained public security・・・・・・・・・・・・・・・・・・・・・・・・・･・15(2) Crisis management・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・・16
IV. Initiatives for solidifying a virtuous cycle of the economy・・・・・・・・・・・・・16
1. Initiatives of government, labor, and management・・・・・・・・・・・・・・・・・・・・16
2. Implementation and realization of the growth strategy・・・・・・・・・・・・・・・・・17
3. Monetary policy・・・・・・・・・・・・・・・・・・・・・・・・・･・・・・・・・・・・・・・・・・・・・・・17
Chapter 3

Economic Impacts and Financial Size・・・・・・・・・・・・・・・・・・・・・・17

Immediate Economic Measures for Extending Virtuous Cycles to Local Economies

Chapter 1

Current conditions of economy and basic concept of economic measures

I. Current conditions of economy
1. The Abe administration has implemented the “three arrows strategy”, including boldmonetary policy, flexible fiscal policy and a growth strategy that promotes private
investment as an economic policy package so called Abenomics. This policy program hasdelivered a series of continuing positive movements. For example, it has contributed to a
22-year high active job openings-to-applicants ratio, large growth in the compensation of
employees, a record-high level of recurrent profits, an ROE (return on equity) of the listedcompanies 1.5-fold the level at the start of the administration, and a 24-year low ofbusiness failures. These economic trends suggest that a virtuous cycle of economy – acycle whereby increased corporate profits are promptly passed on to wage and job
increases, which in turn induces expansion of consumption and increases in investment,with further expansion of corporate profits as a result – is emerging.
Meanwhile, real GDP (gross domestic product) in the third quarter of 2014 contracted at anannualized rate of 1.9 percent, resulting in two consecutive quarters of negative growth.
Although a modest recovery of the economy continues, some weaknesses, especially thoserelated to consumer spending, have been observed.
2. There are some possible causes lying behind such weaknesses in the economy. They
include a decline in demand as a repercussion of the last-minute demand before theconsumption tax increase in April this year, and unseasonable weather in the summer, as
well as rising import prices as a result of the depreciation of the yen. Moreover, theeconomy has seen that headline inflation, which includes the impacts of the consumption
tax rise, has not been covered by growth in household income so far. These factors seem tohave had some particular impact on low-income earners and child-rearing households interms of their family finances, and small and medium enterprises in local economies.
3. It should also be taken into consideration that the economic recovery remains unevenbetween regions. Particularly, some regions with medium- and long-term challenges, suchas aging and depopulation, and delays in action towards globalization, have yet to see
significant benefits from the three-arrows of the economic policy package. This indicatesthat a virtuous cycle of the economy remains to be fully accomplished in local economies.
II. Basic concept of economic measures
1. Based on the above-mentioned understanding of the present conditions, the administration
has decided to formulate a package of economic measures. The administration also decided
to postpone another increase of the consumption tax rate to ten percent from October 2015
to April 2017.
2. The economic measures in this package are targeted at vulnerable areas of the economy
and are intended to address such vulnerabilities as soon as possible. With this package, theadministration aims to secure the realization of a virtuous economic cycle and deliver the
benefits of Abenomics to local economies. This package has the following three prioirites:-1-(1) to stimulate consumption while considering different economic conditions among
regions; (2) to revitalize local economies facing structural challenges through effective
initiatives such as job creation; and (3) to accelerate post-disaster recovery and otheremergency responses, and reconstruction from the Great East Japan Earthquake.
3. To achieve the target of halving the ratio of the national and local governments’ primarybalance deficit to GDP by FY2015 in a steady manner, the administration is committed tomaking its greatest efforts.

Chapter 2

Specific Measures

I. Support for consumers and business operators affected by the current economic stateWith a view to reflecting realities of different regions in taking action to cope with vulnerable
part of the economy, support will be provided for consumers and business operators facing
tough conditions in the current state of the economy to stimulate consumption in the local
economies and reinvigorate local economies, and together with them, some measures will be
adopted to save energy costs and revitalize the housing market.
1. Support for people, including development of living environments
In light of the current state of the economy, support will be provided for local residents andlow-income earners, among others, as well as women and child-rearing households. The
government will also work to enhance living environments of people, so that they can feela greater sense of security in their life.
(1) Stimulation of consumption in regions and provision of livelihood support
Subsidies will be granted to local governments in implementing measures to stimulate
consumption or support the livelihood of people, such as goods vouchers issued with apremium, and grants will be provided to projects for making loans to low-income earners.
• Subsidies for immediate livelihood support for local residents (tentative name)[regional consumption stimulation & livelihood support type] (Cabinet Secretariat, andCabinet Office)• Grants for funds for making livelihood and welfare loans to low-income earners(Ministry of Health, Labour and Welfare)(2) Support for child-rearing, and encouragement of women’s participation
As support for child-rearing households, nursery schools and comprehensive support
centers for child-rearing households will be developed. In addition to countermeasures
for the declining birthrate, participation of women will be encouraged through efforts to
set up systems for helping a diversity of entities in regions work together.
• Promotion of the Accelerating the Plan to Eliminate Children on the Waiting-List(Ministry of Health, Labour and Welfare)• Development of comprehensive support centers for child-rearing households, andother bases for supporting child-rearing (Ministry of Health, Labour and Welfare)• Introduction of medical appliances for better pediatric and perinatal care (Ministry of
Health, Labour and Welfare)-2-• Subsidies for enhancing countermeasures against the regional declining birthrate(Cabinet Office)• Promotion of initiatives implemented by local governments for encouraging women’s
participation (Cabinet Office)• Immediate support project for measures to reduce the number of women failing toundergo a cancer examination as aid for working women (Ministry of Health, Labourand Welfare)• Promotion of telework and other solutions for female national government employees,
etc. for their greater participation (Ministry of Internal Affairs and Communications)etc.
(3) Enhancement of a sense of security in life
Measures to allow people to feel a greater sense of security, such as suicide prevention,
consumer protection regulations, social security, and environmental protection, will be
introduced.
• Promotion of suicide prevention measures in communities (Cabinet Office)• Measures to ensure the safety and security for consumers in regions (Consumer Affairs
Agency)• Development of a computer system for introducing a more flexible repay-as-you-earn
scholarship system (Ministry of Education, Culture, Sports, Science and Technology)• Improvement of computer systems for smooth operation of the social security system(Ministry of Health, Labour and Welfare)• Application of ICT for introducing a social security and taxation number system etc.
for greater convenience of people (Ministry of Internal Affairs and Communications)• Provision of safe and high-quality medical services, including medical expense
allowances for hepatitis patients (Ministry of Health, Labour and Welfare)• Purchase of pre-pandemic vaccines, etc. (Ministry of Health, Labour and Welfare)• Project for promoting visualization of nursing care-related information (Ministry of
Health, Labour and Welfare)• Project for enhancing incentives for health promotion and disease prevention (Ministryof Health, Labour and Welfare)• Promotion of measures to prevent child abuse (Ministry of Health, Labour andWelfare)• Promotion of environmental protection measures, including accelerated developmentof a successor to Ibuki (GOSAT) (Ministry of Education, Culture, Sports, Science andTechnology, and Ministry of the Environment)• Subsidies for promoting development of a recycle-oriented society, etc. (Ministry of
the Environment)• Internal public relations on pressing issues Japanese people are faced with (Cabinet
Office)• Development of better environments for mobile device users, including unlocking ofsubscriber identity modules (SIMs) <Non-budgetary measure> (Ministry of Internal
Affairs and Communications) etc.
2. Support for business operators
To provide business operators with support in light of the current state of the economy,
low-interest loan schemes and other measures will be adopted as part of support for small
and medium-sized enterprises, and small-scale businesses in their cash management and-3-business rehabilitation to help them cope with rising material prices amid the weakening of
the yen. Support will also be provided for those engaged in the agriculture, forestry andfisheries industry, including measures to cope with the falling rice price. In addition,
discounts on tolls for expressways and other measures will be introduced.
• Establishment of low-interest loan schemes and other programs for supporting small
and medium-sized enterprises, and small-scale businesses in their cash management andbusiness rehabilitation to help them cope with rising material prices (Ministry of
Finance, Ministry of Health, Labour and Welfare, and Ministry of Economy, Trade andIndustry)• Project of consultation windows for facilitation of transfer of consumption taxes(Ministry of Economy, Trade and Industry)• Support project for small and medium-sized enterprises, and small-scale businesses forraising minimum wages (Ministry of Health, Labour and Welfare)• Immediate support for those engaged in the agriculture, forestry and fisheries industry,including measures to cope with the falling rice price (Ministry of Agriculture, Forestry
and Fisheries)• Reduction of expressway tolls (Ministry of Land, Infrastructure, Transport and Tourism)etc.
3. Measures to save energy costs
To enhance resilience to the influence of energy prices, energy saving and the introductionof renewable energies will be promoted, and measures will be taken for fields susceptible
to energy prices. In addition, measures needed for a stable supply of resources and energy
will be taken.
(1) Promotion of energy saving and renewable energy
Efforts will be made to facilitate energy saving mainly at housing and other buildings and
SMEs and to introduce consumer fuel cells and fuel cell cars. Work will also be done toensure adoption of renewable energy to the maximum extent.
• Subsidies for projects for promoting the introduction of innovative energy-saving
technologies for housing and other buildings (Ministry of Economy, Trade andIndustry)• Subsidies mainly for local factories and SMEs for introducing energy-saving
equipment (Ministry of Economy, Trade and Industry)• Subsidies for supporting the introduction of consumer fuel cells (ENEFARM)(Ministry of Economy, Trade and Industry)• Development of hydrogen stations for fuel cell cars, and charging stations for electricvehicles (EVs) (Ministry of Economy, Trade and Industry)• Measures to promote introduction of clean-energy cars, etc. (Ministry of Economy,
Trade and Industry)• Greening of local transportation for accelerating penetration of electric vehicles(Ministry of Land, Infrastructure, Transport and Tourism)• Project for supporting introduction of stationary lithium-ion batteries (Ministry of
Economy, Trade and Industry)• Promotion of introduction of local-production-local-consumption-type renewableenergy, etc. (Ministry of Economy, Trade and Industry) etc.

-4-(2) Measures to mitigate the influence of energy prices
Measures will be taken to support fishery managers and small and medium-sized truckers,
businesses affected by energy prices, and efforts will be made to restructure
petrochemical complexes and make them more resilient. For service station operators,
measures will be introduced to rationalize the kerosene delivery business.
• Project for developing safety nets for the fishery business (Ministry of Agriculture,
Forestry and Fisheries)• Measures for small and medium-sized truckers to cope with rising fuel cost (Ministryof Land, Infrastructure, Transport and Tourism)• Introduction of the fuel surcharge to the trucking industry and other measures forfacilitating adjustment of freight charges to appropriate levels <Non-budgetarymeasure> (Ministry of Land, Infrastructure, Transport and Tourism)• Measures for greenhouse horticulture to cope with the rising fuel oil price<Non-budgetary measure> (Ministry of Agriculture, Forestry and Fisheries)• Subsidies for expenses for operating sea routes at remote islands <Non-budgetarymeasure> (Ministry of Land, Infrastructure, Transport and Tourism)• Special local allocation tax for measures implemented by local governments to copewith the rising crude oil price <Non-budgetary measure> (Ministry of Internal Affairs
and Communications)• Project for facilitating the restructuring of petrochemical complexes and efforts tomake them more resilient (Ministry of Economy, Trade and Industry)• Support project for promoting a stable supply of petroleum products (Ministry of
Economy, Trade and Industry)• Support project for promoting rationalization of the kerosene delivery business(Ministry of Economy, Trade and Industry) etc.
(3) Stable supply of resources and energy
To ensure a stable supply of resources and energy at lower prices, efforts will be made topromote development of domestic offshore resources, including methane hydrate andsea-floor hydrothermal deposits, accelerate research and development of innovative
energy technologies, and build systems for controlling outputs of renewable energy,
among others.
• Project for promoting development of methane hydrate (Ministry of Economy, Tradeand Industry)• Research project for development of mining techniques for sea-floor hydrothermal
deposits (Ministry of Economy, Trade and Industry)• Acceleration of research and study for securing offshore resources (Ministry of
Education, Culture, Sports, Science and Technology)• Improvement of techniques for offshore resources development and marinetransportation (Ministry of Land, Infrastructure, Transport and Tourism)• Acceleration of research and study of innovative energy technologies (Ministry of
Education, Culture, Sports, Science and Technology)• Acceleration of the plan for high-performance nuclear fusion experiment equipment(JT-60SA) (Ministry of Education, Culture, Sports, Science and Technology)• Immediate response to the problem of suspended connection of renewable energy to
the grid (Ministry of Economy, Trade and Industry) etc.

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4. Measures to invigorate the housing market
To invigorate the housing market amid the current sluggishness of house construction,
support will be provided mainly for the reduction of housing loan interest rates, andconstruction of housing and other buildings with greater energy-saving performance orrenovation for energy-saving.
• Larger reduction in interest rates of FLAT 35S, provided by the Japan Housing FinanceAgency, etc. (Ministry of Land, Infrastructure, Transport and Tourism)• Introduction of a point system for energy-saving houses (Ministry of Land,
Infrastructure, Transport and Tourism)• Promotion of construction of quality wooden buildings in regions (Ministry of Land,
Infrastructure, Transport and Tourism)• Energy-saving renovation of housing and other buildings and other initiatives asenvironmental protection measures (Ministry of Land, Infrastructure, Transport andTourism)• Extended and expanded exemption of funds used to purchase houses from the gift tax<Non-budgetary measure> (Ministry of Land, Infrastructure, Transport and Tourism)
etc.
II. Reinvigoration of regions through effective initiatives for addressing structural
challenges they are faced with
People can gain a real sense of a turnaround of the economy only when they see local
economies invigorated around the country and a virtuous cycle of the economy established,with the prospect of job creation and wage increases. It is also necessary to immediately carryout some measures for encouraging regions to address medium- and long-term challenges forregions, that is, depopulation and aging, and to take advantage of regional features fordeveloping an autonomous and sustainable society. For that purposes, the Act on Vitalizationof Towns, People, and Jobs (Act No. 136 of 2014), was passed by the 187th extraordinary
session of the Diet and has come into force. According to the Act, the Advisory Council on
Vitalizing Towns, People and Jobs has been set up. Under the lead of the Council, thegovernment will work as one to carry out policy programs concerned, and, according to theprinciples stated in the Act, will quickly start to implement measures that can be introduced
immediately.
1. Precedent implementation of the comprehensive strategy for vitalization of towns, people,
and jobs
The Comprehensive Strategy for Vitalization of Towns, People, and Jobs (Cabinet decisionof December 27, 2014), a five-year plan drawn to indicate the direction of policy programs
the government should carry out to enable regions to overcome depopulation and maintainan energetic society into the future, sets out what the national government must do toinvigorate regions. Projects listed below will be carried out ahead of the other programs tohelp regions prepare their own plans, or Regional Comprehensive Strategies, earlier.
• Subsidies for immediate Livelihood Support for Local Residents (tentative name)[Precedent regional vitalization-type] (Cabinet Secretariat, and Cabinet Office)• Subsidies for the Regional Vitalization Strategy (Cabinet Office)• Support for regions in preparing Regional Comprehensive Strategies, including regional

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•
•
•
•
•
•
•
•
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•
•

vitalization projects based on corporate transactions information, etc. (Ministry of
Economy, Trade and Industry, and Cabinet Secretariat)
Professional human capital project (Cabinet Secretariat and Cabinet Office)Support for facilitating flows of new people and businesses into the local economies(Ministry of Internal Affairs and Communications)
Promotion of Hometown Tax Payment (Ministry of Internal Affairs andCommunications)
Project for helping small and medium-sized enterprises and small-scale businesses
address human capital issues (Ministry of Economy, Trade and Industry)Support for regions in developing and marketing local specialties (Ministry of Economy,
Trade and Industry)
Subsidies for promoting start-ups and second start-ups (Ministry of Economy, Trade andIndustry)
Immediate measures to expand the demand for timber (Ministry of Agriculture, Forestry
and Fisheries)
Promotion of application of ICT for invigorating regions (Ministry of Internal Affairs
and Communications)
Subsidies for regions in enhancing countermeasures for the declining birthrate (same as
mentioned before) (Cabinet Office)Promotion of the Plan to Eliminate Children on the Waiting List (same as mentioned
before) (Ministry of Health, Labour and Welfare)Development of comprehensive support centers for child-rearing households (same as
mentioned before) (Ministry of Health, Labour and Welfare) etc.

2. Invigoration of the economy mainly through promoting industry in regions
Regions can be invigorated only when young people can work there with a sense of
security, provided with job opportunities that offer them reasonable wages and a sense offulfillment. For that purpose, regions need to create and establish industries that make themost of the features they each have to deliver greater added value. They also need todevelop attractive human capital and establish local communities that allow people to live
there with a sense of security.
(1) Development of mechanisms for facilitating creation of new industries and reform ofexisting ones in regions
To facilitate the creation of new industries in regions and reform of existing ones there,
cooperation will be encouraged between diverse stakeholders in industry, government andacademia, as well as the financial sector, support will be provided for those working totake advantage of local features for starting an enterprise or improving business, andcapital will be supplied through growth-oriented funds with a view to helping regions
develop environments that induce innovation.
• Project for the promotion of community open innovations (Ministry of Economy,
Trade and Industry)• Infrastructure development for leading-edge research at universities and otherinstitutions (Ministry of Education, Culture, Sports, Science and Technology)• Structural reform of local economies with the local economic innovation cycle set as
its core (Ministry of Internal Affairs and Communications)• Promotion of loans based on feasibility studies conducted by financial institutions<Non-budgetary measure> (Financial Services Agency)-7-• Promotion of establishment of funds for supporting invigoration of local economies,
and supply of capital (Cabinet Office)• Enhancement of the function of supplying money for growth <Non-budgetarymeasure> (Ministry of Finance, and Ministry of Economy, Trade and Industry)• Expansion of PPP/PFI for developing environments for encouraging private-sector
investment <Non-budgetary measure> (Cabinet Office)• Promotion of formation of international research bases in Okinawa (Cabinet Office)• Measures to strengthen competitiveness of seaports (Ministry of Land, Infrastructure,
Transport and Tourism)• Promotion of decentralization reform <Non-budgetary measure> (Cabinet Office)(2) Support for businesses and industries helpful to invigorating local economies
It is important to support new business investments and active business development,
including business startups and innovation of SMEs, in regions, and spread successful
cases around the country. The agriculture, forestry and fisheries industry, and tourism,
core sectors in many regions, will be promoted to bring out their real strength.
(i) Support for SMEs and small-scale businesses, etc.
Support will be provided for small and medium-sized enterprises and small-scalebusinesses, main players in local economies, for their active effort, including
innovation and marketing. In addition, venture capital will be used to provide venturecompanies with business support.
• Project for the innovation of manufacturing, commerce and services (Ministry of
Economy, Trade and Industry)• Small-scale businesses support package program (Ministry of Economy, Trade andIndustry)• Support for regions in developing and marketing local specialties (same as mentioned
before) (Ministry of Economy, Trade and Industry)• Project for smooth regeneration of small and medium-sized enterprises (Ministry of
Economy, Trade and Industry)• Support project for local middle-ranking companies and SMEs for developing markets
overseas (Ministry of Economy, Trade and Industry)• Project for supporting small and medium-sized enterprises, and small-scale businesses
in their cash management and business rehabilitation (same as mentioned before)(Ministry of Finance, Ministry of Health, Labour and Welfare, and Ministry of
Economy, Trade and Industry)• Subsidies for promoting start-ups and second start-ups (same as mentioned before)(Ministry of Economy, Trade and Industry)• Project for supporting venture companies (Ministry of Economy, Trade and Industry)• Project for promoting research and development for bridging to middle-ranking
companies and SMEs (Ministry of Economy, Trade and Industry)• Project for demonstration of introduction of robots to the manufacturing and service
sectors (Ministry of Economy, Trade and Industry)• Support for vitalization of SMEs and local economies by application of ODA(Ministry of Foreign Affairs) etc.
(ii) Promotion of the agriculture, forestry and fisheries industry
To turn agriculture, forestry, and fisheries into growth sectors, programs will be carried-8-

out for readjustment of farmland into larger plots, introduction and application ofrobots in the agriculture, forestry and fisheries industry and promotion of the sextic
industry, capture of wild birds and animals, strengthening of competitiveness of the
livestock and dairy industry, strengthening of competitiveness of the forestry andtimber industry in a manner that is helpful as forest carbon sink, and demonstration ofbusiness diversification of fishery managers.
• Strengthening of competitiveness of the livestock and dairy industry (Ministry ofAgriculture, Forestry and Fisheries)• Consolidation and concentration of farmland to active farmers for promoting structuralreform (Ministry of Agriculture, Forestry and Fisheries)• Introduction of robots and promotion of sextic industry for providing greater added
value to agricultural, forestry, and fishery produce (Ministry of Agriculture, Forestry
and Fisheries)• Promotion of appeal of Japanese cuisine and food culture, and promotion of exports(Ministry of Agriculture, Forestry and Fisheries)• Support for rural communities for revitalization (Ministry of Agriculture, Forestry and
Fisheries)• Immediate measures to expand the demand for timber (same as mentioned before)(Ministry of Agriculture, Forestry and Fisheries)• Measures to develop a more competitive forestry industry, and measures forfacilitating forest carbon sinks (Ministry of Agriculture, Forestry and Fisheries)• Comprehensive measures for structural reform of the fishery industry, anddevelopment of a more competitive fishery industry (Ministry of Agriculture, Forestry
and Fisheries)• Measures to cope with the falling rice price (same as mentioned before) (Ministry ofAgriculture, Forestry and Fisheries)• Project for capturing specified controlled birds and animals (Ministry of theEnvironment)(iii) Promotion of tourism
With a view to inviting more tourists to visit destinations around Japan, the national
government will work strategically to develop markets, form new broad-area tour
courses in the regions, and enhance systems for immigration control and customs
inspection at local airports.
• Project for immediate measures to promote local tourism (Ministry of Land,
Infrastructure, Transport and Tourism)• Project for generating new inbound demand to achieve 20 million visitors to Japan(Ministry of Land, Infrastructure, Transport and Tourism)• Promotion of establishment of funds for supporting invigoration of regional economies,
and supply of capital (same as mentioned before) (Cabinet Office)• Further spread of cash-less payment <Non-budgetary measure> (Ministry of Economy,
Trade and Industry)• Enhancement of systems for customs and immigration control for promoting tourism
in regions (Ministry of Justice, and <Non-budgetary measure> Ministry of Finance)(3) Support for regions for promoting their appeal
Tourists to Japan and export of products can be increased only when regions around-9-

Japan successfully promote their appeal in a manner that it is easily understood and more
broadly recognized by people overseas, and that special products and tourist spots they
can offer are established as a brand. For that purpose, the entire government will support
contents production, localization, and broadcasting and public relations overseas, andwork to promote the appeal of Japanese cuisine.
• Project for supporting overseas expansion of broadcast contents helpful to invigorate
local economies (Ministry of Internal Affairs and Communications; Ministry ofForeign Affairs; Ministry of Economy, Trade and Industry; and Ministry of Land,
Infrastructure, Transport and Tourism)• International public relations on diverse and powerful economic activities in regions(Cabinet Office)• Promotion of appeal of Japanese cuisine and food culture, and promotion of exports(same as mentioned before) (Ministry of Agriculture, Forestry and Fisheries)• Project for cooperation between broadcasting and telecommunication for promoting
local contents (Ministry of Internal Affairs and Communications)• Enhancement of international television broadcasting (Ministry of Internal Affairs andCommunications) etc.
(4) Promotion of liquidity of the human capital market, and development of housing
environments, etc.
For developing attractive regions and maintaining them, it is necessary to secure diverse
people with great qualities who can play responsible roles in local communities.
Meanwhile, the population of Japan, especially young people, is excessively concentrated
in the Tokyo area at the moment. For correcting this overconcentration, it is necessary to
generate a new flow of people to the regions. For that purpose, measures will be taken to
promote employment of women and young people in industries and the effective use offoreign workforce in the construction sector for a limited period of time. Other measures
will also be taken to secure workers in the construction industry and ensure execution of
construction work mainly through leveling contract placements.
What is also important is to develop local communities that allow every one of the people
living there to live an affluent and meaningful life with a sense of security. For that
purpose, measures will be taken to invigorate city centers and promote effective use of
vacant houses.
• Support for providing young people with job opportunities in, and training for,agriculture, forestry, and fishery (Ministry of Agriculture, Forestry and Fisheries)• Project for appropriate use of foreign workforce in the construction sector (Ministry ofLand, Infrastructure, Transport and Tourism)• Measures to secure and train workers in the construction industry and ensure smooth
execution of public works <Non-budgetary measure> (Ministry of Land, Infrastructure,
Transport and Tourism)• Enhanced initiatives for promoting employment of young people and women in the
motor vehicle transportation business, etc. <Non-budgetary measure> (Ministry ofLand, Infrastructure, Transport and Tourism)• Subsidies for expenses for city center revitalization projects (Ministry of Economy,
Trade and Industry)- 10 -

• Promotion of initiatives for facilitating use and removal of vacant houses<Non-budgetary measure> (Ministry of Land, Infrastructure, Transport and Tourism)• Promotion of appropriate location of urban functions and redevelopment of urban
districts (Ministry of Land, Infrastructure, Transport and Tourism) etc.
3. Action to address individual challenges of regions
For regions with disadvantages in economic transactions, such as isolated islands, theAmami Islands, the Ogasawara Islands, peninsulas, and areas with limited transportation
access to other regions, special measures should be taken. Regions with specificenvironmental issues should also address the problems to preserve pleasant living
environments and maintain their attractiveness.
• Subsidies for invigorating isolated islands (Ministry of Land, Infrastructure, Transport
and Tourism)• Subsidies for promoting the Amami Islands (Ministry of Land, Infrastructure,
Transport and Tourism)• Subsidies for promotion and development projects for the Ogasawara Islands(Ministry of Land, Infrastructure, Transport and Tourism)• Project for research of facilitation of peninsulas promotion and cooperation (Ministryof Land, Infrastructure, Transport and Tourism)• Measures to control foreign shipping boat operation (Ministry of Agriculture, Forestry
and Fisheries)• Project for promoting measures to deal with coastal driftage in regions (Ministry of theEnvironment)• Development of base facilities for maintenance of World Heritage (Ministry of theEnvironment)• Project for immediate measures to control alien species in natural areas (Ministry of
the Environment) etc.

III. Action to address disasters and crises, including accelerated recovery andreconstruction after disasters
This year has seen a series of large-scale natural disasters causing severe human and structuralloss, including landslides in Hiroshima amid the August 2014 Torrential Rains, typhoon
disasters, and an eruption of Mt. Ontake. Accordingly, work will be carried out for the quick
recovery of areas damaged by disasters, and disaster responses, including measures to manage
the risk of natural disasters, will be enhanced.
Work will also be done to accelerate recovery and reconstruction of areas damaged by theGreat East Japan Earthquake, and action to cope with the nuclear plant accident, and enhance
nuclear emergency preparedness.
1. Enhanced disaster recovery and response
Work will be done for quick recovery from large-scale natural disasters, including
landslides in Hiroshima and typhoon disasters, and disaster response will be enhanced- 11 -

through introducing emergency disaster response measures for regions and facilities
expected to suffer severe damage when a disaster takes place, strengthening disaster
forecast and preparedness, securing access to information and logistics during and after
disasters, and improving the anti-seismic performance of schools and other institutions thatshould play central roles as shelters from disasters.
(1) Recovery from landslides, typhoons, and other large-scale disasters
For schools, as well as health and hygiene, public civil engineering, waste treatment, andother facilities that have been damaged by landslides in Hiroshima, typhoons,
earthquakes, and other large-scale natural disasters, work will be carried out for quick
recovery.
• Recovery of school and other facilities from disasters (Ministry of Education, Culture,
Sports, Science and Technology)• Recovery of health and hygiene institutions and waterworks from disasters (Ministryof Health, Labour and Welfare)• Recovery of public civil engineering facilities from disasters (Ministry of Agriculture,
Forestry and Fisheries, and Ministry of Land, Infrastructure, Transport and Tourism)• Recovery of public housing from disasters (Ministry of Land, Infrastructure, Transport
and Tourism)• Support for disposal of disaster waste, and recovery of waste treatment facilities fromdisasters (Ministry of the Environment)• Recovery of oil storage facilities from disasters (Ministry of Economy, Trade andIndustry) etc.
(2) Immediate disaster prevention responses for regions and facilities with greater natural
disaster risk
Given frequent natural disasters in recent years, and in preparedness for a Nankai TroughGreat Earthquake and an inland earthquake in Tokyo, feared to cause large-scale disasters,
disaster prevention and mitigation measures will be introduced as immediate responses
for regions and facilities with greater natural disaster risk.
In light of an eruption of Mt. Ontake, which caused the most such casualties since the war,
infrastructure for volcano observation and research, and observation facilities will be
developed.
• Disaster prevention and mitigation measures for rural communities (Ministry ofAgriculture, Forestry and Fisheries, and Cabinet Office)• Measures to enhance earthquake resistance of waterworks (Ministry of Health, Labourand Welfare, and Cabinet Office)• Project for supporting enhancement of earthquake resistance of high-pressure gas andenergy gas facilities (Ministry of Economy, Trade and Industry)• Immediate disaster prevention responses such as flood and landslide countermeasures
to avert natural disaster risks posed by earthquakes and landslides on roads (Ministryof Land, Infrastructure, Transport and Tourism, and Cabinet Office)• Inundation prevention measures for railway facilities, and their enhancement inearthquake resistance performance (Ministry of Land, Infrastructure, Transport andTourism)- 12 -

• Development of volcano observation and research infrastructure and enhancement ofobservation systems, and safety measures for mountainous areas in national parks(Ministry of Education, Culture, Sports, Science and Technology; Ministry of Land,
Infrastructure, Transport and Tourism; and Ministry of the Environment)• Promotion of large-scale disaster response measures, such as development ofequipment, training facilities and information and communication infrastructure(National Police Agency)• Enhancement of emergency firefighting and rescue units and volunteer fire companies
in disaster response performance and development of shelters (Ministry of Internal
Affairs and Communications) etc.
(3) Construction of information and logistics systems resilient to disasters
With a view to developing mechanisms needed to enable information and logistics
systems to work without trouble even after a large-scale natural disaster, and helping
businesses to resume economic activities as soon as possible after being hit by a disaster,
support will be provided in forming a business continuity plan, and work will be carriedout to maintain and enhance safety net functions.
• Establishment of unified sea traffic control in the Bay of Tokyo (Ministry of Land,
Infrastructure, Transport and Tourism)• Measures for safety at seaports and airports (Ministry of Land, Infrastructure,
Transport and Tourism)• Project for studying waste disposal schemes and developing bases as preparedness forlarge-scale disasters (Ministry of the Environment)• Support for cadastral survey in areas anticipated to be hit by a large-scale disaster(Ministry of Land, Infrastructure, Transport and Tourism)• Promotion of anti-disaster measures by application of ICT (Ministry of Internal Affairs
and Communications)• Promotion of development and introduction of next-generation robots for social
infrastructure (Ministry of Land, Infrastructure, Transport and Tourism)• Support for core private-sector logistics facilities in installing emergency power
equipment (Ministry of Land, Infrastructure, Transport and Tourism)• Development of the Anti-Disaster Radio Communication System, and enhancement ofa procurement and logistics coordination support system (Cabinet Office)• Improvement of disaster response capabilities of the Self-Defense Forces (Ministry of
Defense)• Ensuring of functions served by governmental financial institutions to supply
safety-net money <Non-budgetary measure> (Ministry of Finance, and Ministry of
Economy, Trade and Industry) etc.
(4) Enhancement of earthquake resistance performance of schools and other facilities
For schools and other facilities that should play central roles as shelters in times of
emergencies and disasters, and other buildings used by people, including those withdisabilities, on such occasions, measures will be implemented earlier than originallyplanned to enhance their earthquake resistance performance and disaster management
functions and cope with aging and deterioration.
• Enhancement of earthquake resistance performance of schools and other institutions(Ministry of Education, Culture, Sports, Science and Technology)- 13 -

• Promotion of social welfare institutions in earthquake resistance performance andfirefighting measures (installation of sprinklers at clinics with beds, development ofregional improvement facilities and development of social welfare and school
institutions) (Ministry of Health, Labour and Welfare)• Disaster prevention measures for maintaining functions of public agency facilities(National Police Agency; Ministry of Justice; Ministry of Foreign Affairs; Ministry of
Health, Labour and Welfare; Ministry of Land, Infrastructure, Transport and Tourism;
and Supreme Court)• Measures for safety and accessibility of railway facilities (Ministry of Land,
Infrastructure, Transport and Tourism)• Promotion of replacement of apartment buildings (Ministry of Justice, and<Non-budgetary measure> Ministry of Land, Infrastructure, Transport and Tourism)etc.
2. Acceleration of reconstruction, etc.
Work will be carried out to accelerate recovery and reconstruction of areas damaged by theGreat East Japan Earthquake, and action to deal with the nuclear plant accident, andenhance nuclear emergency preparedness.
(1) Recovery and reconstruction of areas damaged by the Great East Japan Earthquake
With a view to as early recovery and reconstruction as possible of areas damaged by theGreat East Japan Earthquake, part of the surplus of the FY2013 government budget willbe transferred to the Special Account for Reconstruction from the Great East Japan
Earthquake, and measures will be taken to accelerate recovery and reconstruction ofrailways and housing and ensure quick execution of construction work. Public relations
overseas will also be enhanced to prevent damage caused by harmful rumors.
• Transfer of part of the surplus of the FY2013 government budget to the Special
Account for Reconstruction from the Great East Japan Earthquake• Recovery of public schools facilities from disasters (Ministry of Education, Culture,
Sports, Science and Technology)• Recovery of waste treatment facilities from disasters (Ministry of the Environment)• Promotion of coordination between stakeholders for early recovery of railways<Non-budgetary measure> (Ministry of Land, Infrastructure, Transport and Tourism)• Extended and expanded exemption of funds used to purchase houses from the gift tax<Non-budgetary measure> (same as mentioned before) (Ministry of Land,
Infrastructure, Transport and Tourism)• Program for ensured execution of construction work for public disaster restoration
housing <Non-budgetary measure> (Ministry of Land, Infrastructure, Transport andTourism)• Promulgation and promotion of the construction cost integration method for ensuringsmooth execution of construction work for public buildings <Non-budgetary measure>(Ministry of Land, Infrastructure, Transport and Tourism)• Project for supporting public relations overseas as a measure to prevent damage fromharmful rumors (Ministry of Foreign Affairs)• Promotion of establishment of funds for supporting invigoration of regional economies,
and supply of capital (same as mentioned before) (Cabinet Office) etc.

- 14 -

(2) Accelerated action to cope with the nuclear plant accident
New subsidies programs will be set up for constructing intermediate storage facilities toaccelerate action to cope with the accident at the Fukushima Daiichi Nuclear Power Plant
and support for Fukushima for recovering from the nuclear disaster.
• Subsidies for intermediate storage facilities (Ministry of the Environment)• Subsidies for Fukushima for recovering from the nuclear disaster (Reconstruction
Agency)• Project for decommissioning nuclear reactors and disposing of waste water (Ministryof Economy, Trade and Industry)(3) Enhanced nuclear emergency preparedness
As part of measures to enhance nuclear emergency preparedness, disaster preparedness
and emergency monitoring systems around power plants will be enhanced andstrengthened, and with a view to satisfying quickly and appropriately needs ofcommunities where nuclear power plants are located for support in preparing evacuationplans, the Cabinet Office and the Nuclear Regulation Authority will have their structures
further enhanced.
• Enhancement and strengthening of disaster preparedness in areas surrounding nuclear
power plants (Cabinet Office)• Project for developing plant simulators for training (Ministry of the Environment)• Development of an effective system for emergency monitoring (Ministry of theEnvironment)• Enhancement and strengthening of the structures of Cabinet Office and the Nuclear
Regulation Authority as government agencies responsible for nuclear disaster
preparedness (Use of fixed expenditures) (Cabinet Office, and Ministry of theEnvironment)
3. Realization of a safe and secure society(1) Ensuring well-maintained public security
In order to ensure well-maintained public security, enforcement capacities will bestrengthened at the field level to respond to the situation of recent crimes. Court
operations will also be improved, and detention and treatment systems will be reinforcedin correction facilities. Measures will be introduced to regulate dangerous drugs, andstrategic maritime safety schemes will be constructed.
• Strengthening investigative skills and enforcement capacities at the field level, such as
through the improvement of materials, vehicles and vessels (National Police Agency)• Strengthening detention and treatment systems in correction facilities to ensure
well-maintained public security (Ministry of Justice)• Strengthening border control against goods harmful to the society with the
improvement of control devices (Ministry of Finance)• Promotion of regulation of dangerous drugs (Ministry of Health, Labour and Welfare,and <Non-budgetary measure> Ministry of Finance)• Construction of strategic maritime safety schemes (Ministry of Land, Infrastructure,
Transport and Tourism)- 15 -

• Enhancing court operations, such as through the improvement court support devices(Supreme Court)(2) Crisis management
Schemes will be developed to cope with infectious diseases, including Ebola hemorrhagic
fever, and prepare for chemical disasters and terrorism attacks. In order to secure promptand sure transmissions of information to the public, the prime minister’s office’s crisis
management system and government agencies’ measures for information security, etc.
will be strengthened.
In addition, nuclear security measures will be promoted, and work will be carried out tosecure stable operations of the Self-Defense Forces.
• Measures against Ebola hemorrhagic fever (Ministry of Health, Labour and Welfare)• Project for developing facilities to control hospital infection (Ministry of Health,Labour and Welfare)• Project for building up stockpiles of medical supplies for chemical disasters andterrorist attacks. (Ministry of Health, Labour and Welfare)• Strengthening the crisis management system and response capacities of the prime
minister’s office (Cabinet Secretariat)• Development of information-gathering satellites for enhancing crisis management, andsophistication of domestically-developed rockets (Cabinet Secretariat, Ministry of
Education, Culture, Sports, Science and Technology)• Measures for information security at government agencies (Financial Services Agency,
Ministry of Foreign Affairs, and Ministry of Land, Infrastructure, Transport andTourism)• International cooperation for promoting information security measures (Ministry ofInternal Affairs and Communications)• Improvement of vessels and facilities for enhancing nuclear fuel materials
transportation and nuclear security (Ministry of Education, Culture, Sports, Scienceand Technology)• Ensured stability in operations of the Self-Defense Forces (Ministry of Defense)• Ensured smoothness in operation of defense facilities (Ministry of Defense)
IV. Initiatives for solidifying a virtuous cycle of the economy
1. Initiatives of government, labor, and management
On December 16, 2014, the government, the Japan Business Federation (Keidanren), theJapan Chamber of Commerce and Industry, the National Federation of Small Business
Associations, and the Japanese Trade Union Confederation (RENGO) reached anagreement that they would work in cooperation regarding the three points below tomaintain a virtuous cycle of the economy.
(i) Through initiatives the government is going to implement to develop appropriate
environments, the business community will exert the greatest effort to raise wages
and work in a comprehensive manner to help suppliers to pass increased purchaseprices on to customers, and offer them support and cooperation.

- 16 -

(ii) For the wage structure, the employees and management of each company will engage
in thorough talks to make reforms relevant to the company. In doing so, it might besuggested that the employer and employees adopt a wage structure that attaches
greater importance to tasks and roles employees have to perform and contributions
they make and/or that they reform their wage structure to distribute more to thosewith dependent children. It might also be recommended that given that they are on theway to achieving mastery, young people are given pay rises in a stable manner whilepeople in age groups expected to exhibit abilities they have accumulated and deliver
added value see greater importance attached to tasks and roles they have to performand contributions they make in deciding their wage increases.
(iii) Labor and management will work in cooperation to enhance productivity of theservice industry and improve treatment of non-regular workers and/or hire them as
regular employees, among others, for developing an environment that enables wage
increases in a steady and reliable manner.
2. Implementation and realization of the growth strategy
To achieve the targets specified in the Japan Revitalization Strategy (Cabinet Decision ofJune 14, 2013), and the 2014 Revision of Japan Revitalization Strategy (Cabinet Decisionof June 24, 2014), structural and institutional reforms stated in the Strategies for medical
service, agriculture, energy, employment, and other sectors will be materialized andimplemented without exception. Growth Strategy-related laws that have been passed by theDiet at the extraordinary session last year and the regular and extraordinary sessions thisyear will be executed in a steady manner, and with the next regular session of the Diet set
as a target, work will be carried out, including further legislation, to materialize Growth
Strategy-related policy programs quickly and implement them in a solid manner.
3. Monetary policy
The Government expects the Bank of Japan to achieve the price stability target of two
percent at the earliest possible time.

Chapter 3

Economic Impacts and Financial Size

The annex shows the financial size of the economic measures. If we calculate the economic
impacts of the measures at the present moment, the expected impact on real GDP isapproximately 0.7%.
Materialization of institutional reforms and other policy programs and the Growth Strategies
mentioned in this package of economic measures is expected to stimulate private investments
and consumption, and realize an economic growth with increased incomes and employment.

- 17 -

(Note) The economic impacts presented above are rough estimates based on the total budget
size of this economic measures package calculated using expenditure appropriated by
the central government for the package, with subsidy ratios and other elements taken
into account.

- 18 -

(Annex)

Economic Impacts(Central Government
Expenditure)I.

Support for people and business operators relevant to thecurrent state of the economy, etc.

Approx. ¥1.2 trillion

II. Reinvigoration of regions through effective initiatives foraddressing structural challenges they are faced with

Approx. ¥0.6 trillion

III. Action to address disasters and crises, including
accelerated recovery and reconstruction after disasters

Approx. ¥1.7 trillion

IV. Initiatives for solidifying a virtuous cycle of the economy

―

Total

Approx. ¥3.5 trillion- 19 -