HOMESpecial TopicsRENGO’s Comprehensive Measures to Address the Economy and Employment Crisis Adopted by the 19th Central Executive Committee Meeting / April 2009

RENGO’s Comprehensive Measures to Address the Economy and Employment Crisis
Adopted by the 19th Central Executive Committee Meeting / April 2009

In comparison with other advanced countries, the Japanese economy is faced with a very serious situation. The annualized economic growth rate for the 2008 October-December period registered a two digit negative value at minus 12.1%. The active job openings ratio was 0.67, recording a decrease for 12 consecutive months, with the number of unemployed for involuntary reasons surpassing one million and the total unemployment rising to 2.80 million, showing a deterioration in the employment environment. According to a trial calculation by the government, the GDP gap has exceeded minus 20 trillion yen, and a further increase in the unemployment rate is feared.

Now is the time to implement concrete and prompt mobilization of finances such as further social investment, including front-loaded execution of public works that would lead to future development, the strengthening of safety net functions for the enhancement of public feelings of security, and so on in order to resolve this GDP gap and stabilize the economy and employment.

Based on such an understanding, we have summarized below measures which would have immediate effects on demand creation and employment creation, and measures concerning the strengthening of safety nets for the population and workers from the “Japanese Version of the Green New Deal” for the realization of RENGO’s Plan for Creating 1.8 million Jobs.

1. Strengthening of economic measures contributing to domestic demand growth and demand creation

1) Support for the diffusion of energy saving facilities and equipment which would lead to measures against global warming and the establishment of a sustainable energy system

(1) Expansion of support for the diffusion of power generation by renewable energy sources and the technological development of power transmission infrastructure: Enhancement of support projects for the introduction of photovoltaic power generation for houses and public facilities, introduction of large-scale photovoltaic facilities (mega-solar) conducted through cooperation between private operators, local governments, and so on; enhancement of various tax measures for the diffusion of energy saving houses; support for the diffusion of package systems consisting of renewable energy sources, decentralized power generation, and batteries; development of basic technology for a Japan-style advanced smart grid; and so on.
(2) Creation of replacement demand for aging house appliances, vehicles, and so on through the establishment of a “scrap incentive system,” and other means: Expansion of the scope of reduction and exemption for the Automobile Acquisition Tax, the Automobile Weight Tax, and so on; abolition of the provisional tax rate for various vehicle-related taxes; introduction of a subsidy system consisting of a refund for the consumption tax equivalent, and so on.
(3) Research and development of low-emission vehicles and next generation vehicles (including research and development of light-weight body materials), enhancement of support for the diffusion of these, including that for infrastructure, and short-term intensive replacement of official cars, and so on.
(4) Enhancement of support for high-efficiency equipment and facilities in the household and industrial sectors.
(5) Enhancement and support for non-food-crop bioenergy supply.
(6) Development of production and transportation technology for the commercialization of methane hydrate.
(7) Development of technology for recycling rare metals and support for investment in recycling projects such as “urban mines” and “urban oil fields” (plastic scrap, used PET bottles, and so on).

2) Support for the diffusion of facilities and equipment related to safety and security of life and social investment

(1) Advancement of measures concerning seismic retrofits, aging, and asbestos related to bridges, highways, public facilities, and so on.
(2) Promotion of multipurpose underground conduits, enhancement of support for replacement of aging gas and water pipes, and seismic retrofits.
(3) Enhancement of support for the promotion of insulation specification, energy conservation, earthquake resistance, and universal design for houses.
(4) Establishment of a purchase and installation support system for the installation of fire alarms for houses.
(5) Support for promotion of the replacement of unsafe equipment as designated by the Consumer Products Safety Law.
(6) Installation of energy-conservation-type traffic signals and streetlights.
(7) Improvement and high-function paving of trunk roads and residential roads: Introduction of universal designs; separation of roads for vehicles, bicycles, and pedestrians; permeable and drainage pavements; and so on.
(8) Promotion of compact cities: Measures for the regeneration and activation of local cities in coordination with the medical and nursing care sector, the improvement of public transportation, and the promotion of retirement villages.
(9) Enhancement of support for the Light Rail Transit (LRT) and enhancement and promotion of the use of other forms of public transportation (utilization of Intelligent Transport Systems (ITS), and so on).
(10) Installation of platform safety guard rails for railways and subways in metropolitan areas.
(11) Introduction of a bicycle renting system (Japanese version of Vélib’) into metropolitan areas.
(12) Promotion of elevated railway crossing projects.
(13) Advancement of improvement of loop roads in the three major metropolitan areas and promotion of upgrading of major airports and ports.
(14) Integration of loading and unloading facilities for ports and freight railways, and improvement and reinforcement of container yards.
(15) Support for maintenance of ferries and coastal shipping services.
(16) Promotion of replacement (with newly-built ships) of aging state-owned and local government-owned ships.
(17) Utilization of mega-floats as offshore platforms for anti-disaster bases and wind power generation.
(18) Review of the situation concerning the bearing of expenses for central-government managed projects by local governments.

3) Support for the realization of the advanced information society

(1) Support for low-income families in preparation for digital terrestrial broadcasting (introduction of a subsidy system for purchasing equipment, and so on).
(2) Improvement of the environment for further development and promotion of the utilization of broadband networks (support system for installation of broadband circuits, training of maintenance engineers, and so on).

4) Promotion and support for agriculture, forestry and fisheries

(1) Provision of proper information and consultation for those seeking jobs in agriculture, forestry and fisheries through the establishment of one-stop support centers.
(2) Expansion of the scale of projects for measures supporting those newly employed in the agriculture, forestry and fisheries sector (“agricultural” employment projects, projects for measures concerning young people in green employment, projects for the securing and training of young people in fisheries, and so on).
(3) Enhancement of support for the establishment of and training for corporate farms and effective utilization of plant factories.
(4) Support for front-loaded execution of additional forest improvement projects necessary for achieving the goals of the policy measures for forest carbon absorption under the Kyoto Protocol.
(5) Expansion of support for the introduction of high-performance machinery and the improvement of forestry road networks and so on for promotion of cost saving in the improvement and management of forests. Intensive methods of forest management, measures concerning absentee forest owners, clarification of unclear boundary lines, enhancement of projects to promote the thinning of forests in poor condition.

2. Enhancement and strengthening of employment safety nets, such as vocational training, job placement services, and so on

1) Relaxation of conditions for subsidies for employment adjustment: Enhancement of subsidy ratio, education and training expenses, the number of days of payment, workers (regular or non-regular) covered, as well as a simplification of the application procedures.
2) Expansion of “Non-Regular Worker Employment Support Centers.”
3) Strengthening of instructions to companies sending and receiving dispatch workers concerning midway termination of worker dispatch contracts, dismissal of dispatch workers, and so on.
4) Establishment of counseling offices for employment issues such as termination of consecutive-term employment of foreign workers. Strengthening of measures for foreigners in Industrial Training Programs (ITP) and Technical Internship Programs (TIP) (unpaid wages, repatriation expenses, and so on).
5) Strengthening of measures concerning the issue of cancellation of promised employment of new graduates.
6) Promotion of participation of labor and management in the “Regional Fund Project Council” in the “Special Subsidy for Home-town Employment Regeneration.”
7) Creation of new jobs, the development of a vocational training curriculum, and corresponding strengthening of capability development and vocational training.
8) Diversification of training subjects to meet the needs of society and corporations and enhancement of high-level training through prolongation of training periods, and so on.
9) Strengthening of cooperation between ‘Hello Work’ employment placement offices, capability development and vocational training institutions, and prefectural governments (including all local administrative areas).
10) Increase in the numbers of public school teachers, school education support personnel, and enhancement of labor education, consumer education, foreign language education, and so on

3. Tax reform for the strengthening of the income redistribution function, and so on

1) Implementation of an income tax reduction focused on middle- and low-income citizens and establishment of a subsidy system for poverty-stricken families. Consideration of the establishment of a “negative income tax” (tax exemption with supplementary payments) system for low-income citizens.
2) Strengthening of the income redistribution function of taxation through a progressive system of income tax and a strengthening of taxation on assets.
3) Expansion of application of the housing promotion tax system to the backbone (mid-level workers) group, expansion of housing loan tax deduction to residence tax to ensure that the tax payer can make full use of the tax exemption available, expansion of the tax exemption for inheritance for the purpose of purchasing housing.

4. Prevention of credit crunch and stability of financial/capital markets through provision of ample funds

1) Relaxation of the BIS regulation

(1) Consideration of making the equity ratio regulation more flexible.
(2) Relaxation of credit risk assessment standards within Japan.

2) Enhancement of the provision of funds for small and medium-sized/local enterprises and simplification of procedures by government-related and private financial institutions

(1) Further enhancement of the emergency guarantee system and safety net loaning system.
(2) Simplification (speedup) at desks of municipalities for credit guarantee qualification certification and diversification of desks (Chamber of Commerce and Industry, private financial institutions, and so on).
(3) Further relaxation of the bad-loan standard for improvement of the loan environment to enable financial institutions to respond more flexibly to a relaxation in loan conditionality.
(4) Revision of the principle overemphasizing mortgage and personal guarantee by proprietors and promotion of stock and trade receivables as collateral for loans.
(5) Thorough propagation of the intent and content of the financial inspection manual (for loans to small- and medium-size enterprises) and strengthening of the oversight function.
(6) Promotion of utilization of public funds by local financial institutions.
(7) Establishment of an organization to support the regeneration of usiness by small and medium-sized, backbone enterprises, and so on.

3) Stability of the financial/capital market

(1) Continuation of regulations on short selling.
(2) Expansion of the stock holding limit of the Banks’ Shareholdings Purchase Corporation, the Bank of Japan, and so on.
(3) Moves towards fair and stabilized exchange rates.

5. Strengthening of the function of the social safety nets for enhancing the feeling of security of the population

1) Improvement and enhancement of employment security

(1) Establishment of an “Employment and Livelihood Support System”

  • To secure livelihoods though giving support such as the provision of necessary allowances, on condition of attending a vocational training course, to those who are not covered by the present employment insurance system.

  • Those to be covered by this system shall be people with incomes less than a certain amount, falling into one of the following categories: 1) Those not covered by the (general) employment insurance  (those not yet employed or self-employed persons having gone out of business); 2) Those who cannot find a job after termination of the basic allowance payment period of the employment insurance (long-term unemployed people); 3) Employment insurance policy holders who left employment before satisfying the necessary conditions for receiving the basic allowance (dispatch workers under short-term employment and those with fixed-period contracts); and so on.

(2) Strengthening of the functions of the employment insurance system

  • The insurance premium rate of the employment insurance and the insurance premium rate related to the two services stipulated in the Employment Insurance Law shall not be raised for the time being.

  • Enhancement of the coverage of the employment insurance system, relaxation of the conditions for receiving the basic allowance, and improvement of the content of the benefits.

  • of a “minimum allowance payment” (tentative name) (a basic allowance of around 3,263 yen/day [about US$33]).

(3) Enhancement of the “ROKIN (Labor Bank) special loan system for worker livelihood support.”
(4) Establishment of a counseling desk for medical care and the social insurance system, including pensions, for the unemployed (jobseekers) at “Hello Work” offices and other locations, and implementation of the provision of information concerning the insurance premium exemption system, and so on.

2) Improvement and enhancement of the medical care/nursing care/childcare sector

(1) Support for the securing of doctors specializing in newly-born infants, improvement of the nurse/co-medical system, increase in the NICUs (Neonatal Intensive Care Unit) bed capacity, and so on.
(2) Support for the implementation of clinical training of potential female doctors/potential nurses/maternity nurses and support for the establishment of visiting nurse stations and the establishment of visiting nurse sections in medical institutions.
(3) Support for the deployment of medical helicopters.
(4) Enhancement of support for the establishment of maternity nurse wards in hospitals/maternity outpatient clinics.
(5) Support for the development and commercialization of life-support robots for alleviating heavy work at medical/nursing sites.
(6) Support for correspondence courses expenses for obtaining the nursing welfare caregiver license and expenses for attending nursing welfare caregiver training institutions.
(7) Advancement of the improvement of centers for research and development, and production and stockpiling of the next generation vaccines, including those against new strains of influenza and other diseases.

3) Strengthening of childrearing support

(1) Establishment of additional quality day-nurseries and after-school daycare clubs (care of schoolchildren).
(2) Support for improvement of conditions for and an increase in the number of child-care workers and after-school daycare instructors.
(3) Provision of free medical care/health checks for preschool children, in-kind provision of maternity expenses, free provision of childcare for children under three.
(4) Enhancement of childrearing support projects such as emergency support centers in local communities.
(5) Raising the child-support allowance and continuation and expansion of the coverage of the “Special Allowance for Childrearing Support.”

6. Enhancement of housing security and education support measures for the unemployed and low-income groups

1) Housing security for the unemployed and low-income groups

(1) Active utilization of the Urban Renaissance Agency (former Housing Corporation), public housing, and Employment Promotion Houses; relaxation of conditions for tenants and implementation of rent reduction measures.
(2) Implementation of housing loan repayment postponement, principal repayment postponement, and so on, and implementation of compensation by the national government for losses incurred by financial institutions.
(3) Establishment of a system for “housing rent subsidies” for people with an income below a certain level (taking “housing assistance” out of “Public Assistance”) and establishment of a “housing rent tax exemption system” (upper limit 240,000 yen [approximately US$2,400]).

2) Enhancement of education and enrollment support for the unemployed and low-income families

(1) Enhancement of the elementary school and junior high school enrollment assistance system.
(2) Student support organization for students of high schools, technical junior colleges, universities, graduate schools, and vocational colleges; enhancement of prefectural emergency scholarship loans, and so on, and implementation of measures for repayment postponement in cases such as unemployment, and so on.
(3) Enhancement of the entrance fee/tuition fee exemption system.
(4) Active public information activities concerning the various systems of the national and local governments, and so on.