ial amount of public works spending into the economy, some of which is still being disbursed in 1994 ("Background Notes" 9).
In 1994 the Diet passed tax reform legislation that will extend FY 1994 income tax cuts totaling yen 5.5 trillion ($55 billion) through FY 1995. A "permanent" portion of the income tax cut (yen 3.5 trillion/$35 billion) will continue thereafter. The remaining "temporary" portion (yen 2 trillion/$20 billion) of the tax cut is currently scheduled to be dropped after 1996, but may be dropped at the end of 1995. To offset the tax cut, beginning in April 1997, the consumption tax (a value-added tax) is to be raised from the current rate of three percent to five percent. In addition, the government announced a new public works investment program totaling yen 630 trillion ($6.3 trillion) that will run from FY 1995 through FY 2004 ("Country Commercial Guide" 54).
In order to ease credit conditions, the Bank of Japan lowered the Official Discount Rate (ODR) seven times between mid-1991 and September 199
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