The government plans to draw up a bill to galvanize Japanese industry amid intensifying global competition, as a pillar of its growth strategy to fight deflation, sources close to the matter said Thursday.
The envisioned bill, to be submitted to an extraordinary Diet session slated for this autumn, would aim to streamline sluggish businesses and prompt companies to enter new fields through tax breaks and support for career changers, the sources said.
The growth strategy, expected to be composed of around 30 items including utilization of private funds for public works projects and the creation of special economic zones, is part of Prime Minister Shinzo Abe's "three arrows," along with aggressive monetary policy and flexible fiscal spending.
With expectations growing for the prime minister's economic policies, dubbed "Abenomics," the government, launched on Dec. 26, will accelerate efforts to conquer Japan's nearly two decades of deflationary recession by making extensive use of the human resources, funds and information of the public and private sectors.
The Cabinet plans to start finalizing the growth strategy this month and to endorse it in mid-June as Abe is aiming to explain the details at a summit of the Group of Eight industrialized countries in Britain next month.
But many measures have yet to be given shape. Abe's government needs to quickly hammer out effective steps to bolster economic growth, while it is facing difficulties in speeding up deregulation due in part to strong resistance from the agricultural and medical sectors.
The government will craft an "emergency structural reform program" for the next five years, the sources said.
To spur the economy by boosting investment and attracting foreign businesses to Japan, strategic special zones would be created in Tokyo as well as Osaka and Aichi prefectures, where corporate taxes would be drastically cut.
The government has also proposed implementing measures to shore up Japan's declining agriculture, such as boosting crop exports and promoting intensive farming, with an eye on the country's entry into talks on the U.S.-led Trans-Pacific Partnership tariff-cutting pact.
Abe has also pledged to submit bills to move ahead with the practical use of regenerative medical techniques, including utilization of induced pluripotent stem cells, or iPS cells.