Japan clears cash hand-out bill

Japan wants people to get spending again

Japan's parliament has passed legislation to give a cash hand-out to every resident in attempt to boost the recession-hit economy.

Most people will get at least 12,000 yen ($121; £86) under the $20bn plan.

But there are fears many Japanese, who have a strong tradition of saving, will hang on to the cash and not spend it.

The cash hand-out forms the centrepiece of a stimulus package to revive Japan's economy, which is in a far sharper recession than the US or Europe.

Japan's GDP dropped 3.3% in the final quarter of 2008, a much steeper decline than in the US, which saw a 1.6% drop, and the UK, which contracted by 1.5%.

Political battle

Children under 18 and people aged over 65 would get 20,000 yen as part of the scheme, which was first proposed in October last year.

WHAT 12,000 YEN GETS YOU 3-day ticket for Tokyo Disneyland 8 movie tickets Express bullet train ticket from Tokyo to Kyoto

Some critics of the plan say it is a ploy to boost the popularity of Prime Minister Taro Aso and will only expand Japan's bulging budget deficit.

Mr Aso's approval ratings have sunk to about 10%, and he must call an election by September.

The legislation enacting the stimulus plan has been mired in Japan's parliament for weeks.

It was passed after the government-controlled lower house overruled a no vote in the upper house, which is dominated by the opposition.