Capital spending on 153 low-carbon projects across Japan will total $6.4 billion over the next 15 months, using government subsidies as seed money and ranging from production of low-emitting cars, lithium-ion batteries, LED lighting and solar panels to energy-saving electrical appliances.
The planned investment will directly create almost 10,000 jobs, the Ministry of Economy, Trade and Industry said on Monday, in a stimulus the Japanese government decided in September to bolster the economy.
Prime Minister Naoto Kan has said Japan is aiming to help revive an economy struggling with persistent deflation and a rising yen by creating jobs through green and other potential growth industries.
When jobs at parts suppliers and other related industries are included, the investment is expected to create new demand worth 1.9 trillion yen ($22.9 billion) a year and about 95,000 new jobs, a ministry official told a news conference.
“We regularly check the effect of job creation with companies that receive subsidies, and if there is no positive feedback we would deal with it strictly, including forcing them to return subsidies,” said Gun Saito, head of the ministry’s green job creation and industrial facility section.
Although a split parliament makes passage of budget-related bills difficult, the subsidies of 110 billion yen ($1.3 billion) do not need to go through the regular budgetary process as the government has tapped a surplus in this fiscal year’s budget.
The subsidies to be paid from now until March 2012 are up to 15 billion yen per project or up to a third of planned capital spending. But 142 companies, including two foreign firms, have decided to add their own money, with their total investment in the 153 projects seen at some 530 billion yen ($6.4 billion).
Japan decided earlier this month to lower the effective corporate tax rate of around 40 percent by 5 percentage points, starting in the financial year beginning in April, in an effort to increase companies’ competitiveness and discourage them from moving operations overseas.
Companies carrying out the 153 projects include Fuji Electric Holding, Toda Kogyo Corp, Toshiba Corp, Sharp Corp and Panasonic Corp.
($1=82.96 Yen)
