1. Hold an extraordinary session of the Diet in November to determine the following emergency economic package, implementing them as soon as possible to restore economic balance, create jobs and stabilize living standards.

2. Specification and implementation of the following:

• A tax cut of more than 6 trillion-yen and 4 trillion-yen in provisions from January 1999.
• A plan for creating one million jobs.
• Social security reform to ensure a safe and stable pension system.
• Tough countermeasures on the credit crunch.
• Prompt creation of the 3rd supplementary fiscal budget 1999 including a stimulus package with over 10 trillion-yen in government spending.
• Freeze the Financial Structure Reform Act and transform the 1999 fiscal budget into a large-scale economic stimulus budget.

(1) Early enactment of over 6 trillion-yen in income tax cuts.
Institutionalization of a tax cut package of over 4 trillion-yen and an institutional tax cut of more than 2 trillion-yen by January 1999 at the latest.
Implement the following tax cuts:

1. Housing tax: Create a deduction for interest on housing loans. Create a system that allows taxpayers to choose to either expand deduction limits or extend the deduction period after home purchases. Create house rent deductions and abolish registration and license taxes.
2. Education tax: Create a deduction for a certain school fees, etc.
3. Automotive tax: Exempt taxes on replacement car purchases. Create tax breaks for the purchases of clean fuel/low polluting cars.

(2) Implement 4 trillion-yen in benefits to households with children and senior families.

1. Radical increase in dependant allowance (\10,000 per a child through the completion of compulsory education, \20,000 from the third child).
2. Encourage the stabilization of households and the improvement of consumer spending through temporary payment of emergency "Silver" allowance (an addition of \5,000 a month in benefits until economic recovery).

(3) Concrete proposal of plan to create one million jobs
Integrate the following items into a concrete plan at the Government-Labor-Management Employment Measures Council, and incorporate them into the 3rd supplementary budget and the 1999 fiscal budget.

1. Develop concrete plans for creating one million jobs, with an emphasis on medical/welfare, housing, information communication, the environment, and education.
   a) Generate welfare/nursing jobs by implementing the Welfare Super Gold Plan.
   b) Employ large numbers of teacher licensees through immediate implementation of the "30 children per class" system.
   c) Hire many forestry workers through the Emergency Forest Development Plan.
2. Stabilize employment and living standards by drastically expanding qualification for the "Employment Adjustment Grants System" (small and mid-sized businesses can receive educational aid with designations from regional/industrial park groups), and improve bankruptcy legislation.
3. Step up relief measures for the support of the unemployed, such as aiding in finding re-employment and increasing unemployment payments during the period of unemployment (extending the benefits period, raising the insurance term limit, etc.).

(4) Extend and broaden social security [a 'secure and stable pension,' medical and care services] and freeze rising social insurance costs.

1. Restore confidence in the public pension system by increasing government liability on basic pensions to one half, freeze insurance increases, and stabilize the system.
2. Immediately provide care services by securing "home-care aides" in accordance with the long-term care insurance system.

(5) Dramatically strengthen countermeasures against Credit Crunch.
Stabilize the financial system through finance reform-related laws in order to prevent financial institutions from refusing to grant loans, while working to:

1. Expand the credit guarantee system for small and mid-sized firms, and increase the financing of government banking agencies.
2. Revise the Japan Development Bank Law to free up a supply of working funds for medium-standing firms.
3. Revise the Ministry of Finance and Ministry of Labor's demands to expand financing for the laborers credit cooperative to small and mid-sized firms, and enlarge the credit guarantee system for the laborers credit cooperative to ensure employment.

(6) Early enactment of the third supplementary budget with the inclusion of more than 10 trillion yen (more than 20 trillion yen project scale) in government spending.
To supplement the "deflation gap," the third supplementary fiscal budget for 1998 should be drawn up by the end of this year in addition to the tax cuts and other benefits mentioned above. Over 10 trillion-yen in government spending as a supplementary economic stimulus measure should be added to the budget (exceeding 20 trillion-yen as a business scale including financing projects, local public organization's projects, etc.). Further, the following projects should be enacted immediately to stimulate the job market.

1. Initiate projects for the creation of one million jobs. The projects will include developing and securing human resources for nursing, teachers and forest conservation personnel.
2. Emphasize public works that will expand domestic demand during 1998 in the following living standard-related fields:
   Building a welfare base (including nursing and daycare), encouraging housing construction, supporting home reconstruction, promoting handicapped-access housing, building urban and information (including countermeasures against the Millenium bug) infrastructures and investment in environmental and recycling programs. In addition, disaster prevention, welfare for the aged, and urban renewal programs (like urban redevelopment and city planning). Moreover, adopt a grace period for housing loan payments for the unemployed and supplement resource funds from general accounts to increase unemployment benefits.
3. Those projects should be government funded and steps should be taken to prevent financially overburdening local governments in regards to local projects. In addition, project dates should be moved up to put the project in motion by the end of 1998 and be fully implemented by the spring of 1999.

(7) Draw up a large-scale fiscal budget for 1999 to improve the economy.
The 1999 fiscal budget should exceed the 1998 fiscal budget (including the first supplementary budget) and maintain and expand governmental demand in order to break out of negative growth and stabilize the economy. For these reasons, the Financial Structure Reform Act will be frozen.