TOKYO (Reuters) – Japanese premier Fumio Kishida’s new advisory panel called for an $88 billion university fund on Monday and another one aimed at backing research and development on digital and green innovation as pillars of the country’s new growth strategy.
Some of the growth initiatives, like the university fund, will likely be featured in the planned stimulus package worth several tens of trillion yen that Kishida has pledged to compile around the middle of this month, government officials said.
The panel’s growth strategy, which was presented at its meeting on Monday, made no mention of the size or details of the stimulus and extra budget to fund it.
The strategy will serve as a key roadmap for Kishida as he pursues an economic policy mix of pro-growth policies of former premier Shinzo Abe’s “Abenomics” stimulus steps and efforts to more directly shift wealth from companies to households.
“To create the world’s highest standard research university, we should establish a 10-trillion-yen university fund by the fiscal year end,” the panel said in its recommendations.
“We need to make bold investment in R&D in areas such as digital, green, AI, quantum … as a step towards an advanced science technology nation.”
For re-distributing wealth, the panel urged revamping the tax system in a way that will make it favourable for companies, which raise pay for employees, through greater tax credit and other measures.
The proposals come as Kishida’s government is considering an economic stimulus package worth more than 30 trillion yen ($265 billion) to ease the pain from the COVID-19 pandemic, which would need selling new bonds, Kyodo news reported.
Kishida has also pledged to put economic security among his policy priorities, including boosting domestic output of semiconductors.
To this end, the panel called for the creation of a strong supply chain and construction of domestic chip factories with state support over the coming years.
The government is likely to subsidise up to half of Taiwan’s TSMC’s estimated 1-trillion-yen ($8.82 billion) investment for building a chip plant in Kumamoto, southern Japan, the Nikkei has reported.
($1 = 113.3500 yen)
(Reporting by Tetsushi Kajimoto; Editing by Himani Sarkar)
