New Zealand Welcomes Japan's Economic Package

"Prime Minister Hashimoto's economic stimulus package is a positive and constructive move to rebuild confidence in the Japanese economy," Prime Minister Jenny Shipley said today.

"We wish the Japanese government success in their efforts to get the economy growing again as quickly as possible."

Mrs Shipley was commenting on the recent economic policy announcement released by the Japanese government. Key measures include one-off tax cuts of ¥2 trillion (NZ$27 billion) in both FY98 and FY99, and more than ¥7.7 trillion (NZ$105 billion) in public works expenditure. Moves towards lower corporate tax rates and the promotion of asset securitisation and other measures to help disposal of bad debts from the banking system were also announced.

"The Japanese government is moving to make full use of Japan's enormous financial, human and technological resources to restore economic vitality," the Prime Minister said.

"During my recent visit I discussed with Prime Minister Hashimoto the positive impact of deregulation and structural change on the New Zealand economy over the last decade. He is aware of the need for bold measures to make Japan's economic structure more flexible and dynamic, and to integrate it more fully with the global economy.

"I am also encouraged by the deregulatory steps his government has announced, and hope that we may expect further progress in this area.

"It is important to recognise the contribution Japan is making, both bilaterally and through agencies such as the IMF, to troubled East Asian economies. As the world's second largest economy, Japan's own performance is also crucial to the prosperity of the regional and global economies.

"Japan is also of course one of New Zealand's key political and trading partners, and we have a vital interest in Japan's economic well-being," Mrs Shipley concluded.