The main opposition Democratic Party of Japan (DPJ), which has vowed to pay more heed to consumers than firms and break bureaucrats' grip on policy, leads the ruling Liberal Democratic Party (LDP) in voter opinion polls ahead of an August 30 election.
Following are key pledges by both parties.
DPJ - Increase disposable household income to spur consumption via steps such as child allowances. Achieve stable growth by transforming the economy to one led by domestic demand. Bring down the corporate tax rate for small and mid-sized firms to 11 percent from 18 percent now. Establish a nationwide minimum wage of 800 yen per hour and aim to raise it to 1,000 yen.
LDP - Achieve annualized economic growth of 2 percent by the second half of fiscal 2010, which starts next April. Boost average disposable household incomes by 1 million yen within 10 years. Create 40-60 trillion yen worth of demand and secure two million jobs over the next three years.
CHILD CARE, BOOST HOUSEHOLD INCOME
DPJ - Pay families 26,000 yen ($275.2) per month for each child from April 2011. Scrap fees for public high schools and gradually end highway tolls. Abolish a decades-old surcharge of about 25 yen per liter on gasoline and other car-related taxes to achieve 2.5 trillion yen in tax cuts.
LDP - Gradually lower preschool education fees for children aged 3 to 5 and eliminate them within three years.
DPJ - Cut greenhouse gas emissions by 25 percent below 1990 levels by 2020 and by more than 60 percent by 2050. Create a domestic emissions trading market, place compulsory volume caps on emitters and consider introducing a climate tax.
LDP - Enact a law to promote a low carbon society. Achieve Japan's 2020 target to cut emissions by 15 percent from 2005 levels. Aim for a 20-fold increase in the use of solar power by 2020 and a 40-fold rise from present levels by 2030.
HOW TO FUND POLICIES, PROMOTE FISCAL REFORMS
DPJ - Gradually implement its key proposed policies such as on child allowances at a cost of 7.1 trillion yen in the first year starting next April, rising to 16.8 trillion yen in the fourth year, through steps such as cutting waste, using profits from Japan's foreign exchange reserves and selling government assets.
LDP - Reform the consumption tax as soon as the economy recovers to fund social welfare costs. Bring the primary balance deficit -- the budget deficit outside debt issuance and services -- into the black within 10 years and halve the ratio of the primary balance deficit to GDP within five years.
HEALTH CARE, PENSIONS
DPJ - Focus on recovering missing pension records for two years starting next April. Standardize the pension system with a minimum of 70,000 yen per month for those who had low incomes or who lack sufficient pension contributions.
LDP - Aim to solve the problem of missing pension records by the end of 2010. Bolster elderly care facilities within three years.
FOREIGN RELATIONS, SECURITY
DPJ - Build a close and equal Japan-U.S. alliance to serve as the foundation of Japan's foreign policy. Revise the Japan-U.S. Status of Forces Agreement, which spells out the terms under which U.S. forces operate in Japan, and reexamine the realignment of U.S. military forces in the country. Promote free trade agreement negotiations with the United States. Develop relations of mutual trust with China, South Korea and other Asian countries.
LDP - Stress the U.S.-Japan alliance as the core of Japan's diplomatic and security policies. Enact laws to allow the rapid participation of Japan's military in operations that contribute to peace. Take necessary steps to be able to intercept North Korean ballistic missiles aimed at its ally, the United States. Continue a naval refueling mission in support of U.S.-led operations in Afghanistan.
(Reporting by Yoko Nishikawa)