Japan to launch “productivity revolution”

A policy package will aim for wage growth and fight deflation in the next few years

Japan to launch “productivity revolution”
Jap
an will seek to double productivity to 2% through 2020 from the current 0.9%, the Japan Times reported Tuesday.

The government will announce the target alongside a set of policy measures it will adopt on Friday to occasion a “productivity revolution.”
 
The revolution, which will entail increased use of big data and AI technology, will ensure sustainable wage growth and overcome deflation.

The policy package will also:
  • Aim to increase corporate capital spending by 10% by 2020;
  • Achieve wage growth of at least 3% every year in the next three years;
  • Reduce corporate tax burdens to internationally competitive levels;
  • Provide corporate tax incentives to small companies increasing wages;
  • Offer fixed-asset tax cuts and subsidies to small companies.

The next 10 years will also be set as an intensive period for promoting smooth business succession among small companies. The government will expand the scope of an inheritance tax moratorium.

Companies will be encouraged to use their cash and deposits for capital expenditures and investment in human resource development.

Aside from this package, the Defense Ministry will create a new program to pay benefits to companies that would hire Self-Defense Forces reservists, a
move that will address understaffing.

This will make it easier for companies to hire reservists and ready reservists who normally work in the private sector but who work as SDF members in times of emergencies and natural disasters.
The ministry would pay some ¥30,000 a day to companies to hire substitute staff when employees are absent from for SDF service or in the event they are injured while on duty or training.


Related stories:
Japan employers urged to prepare for conversion rule
Japan firms hiring full-time despite potentially slimmer profits
 

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