Page last updated at 11:17 GMT, Wednesday, 4 March 2009

Japan clears cash hand-out bill

Men look at electronics store window in Tokyo
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.

Japan bullet train
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.

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