IANS | 20 Feb, 2012
The salaries of Japanese government employees will be cut by 7.8 percent for two years from the 2012 fiscal year, a media report said Sunday.

According to the Yomiuri Shimbun daily, policy chiefs of the ruling Democratic Party of Japan and opposition Liberal Democratic Party and New Komeito have agreed to the cuts.

The cuts will include a retroactive 0.23 percent cut extending back to April 2011, in line with a figure proposed by the National Personnel Authority.

Funds saved through the salary cuts -- totalling about 588 billion yen -- will be used for the reconstruction of areas devastated by the earthquake last March.

According to the agreement the chairmen of the parties' policy research councils reached Friday, a bill co-sponsored by the two opposition parties will be modified so that it can be passed in the Diet by the end of this month with an eye toward implementing the cuts in April, the newspaper said.

The three parties are still negotiating on whether salaries of local government employees should also be cut in line with those of national government workers.