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They will lose tax grants and subsidies, and in exchange will be allowed to keep about ¥3 trillion of the tax revenues raised in their towns and prefectures.
The measures call for the government to spend ¥264.3 billion on subsidies to encourage capital expenditure in areas damaged by the nuclear disaster and earthquake last year, as well as tax grants to help rural areas copy with floods.
The parties said they would seek a swift end to deferrals on government spending like tax grants to rural governments that were introduced in September to avoid a cash crunch because of the deadlock over the budget.
On September 4th it postponed ¥4.1 trillion $52.4 billionn) in tax grants to towns and cities, following its failure to pass a bill to issue bonds to help fund this year's budget.
The cabinet approved a delay, through November, of 5 trillion yen $63 billionn) in public spending, most of that in tax grants for local governments and aid for universities.
But Japan's central bank has already been forced to act, pumping about 2 trillion yen $25 billionn) into the market to meet an expected jump in demand as local governments face delays in getting their tax grants.
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A tax grant program important to the solar industry has already expired, while a tax credit favored by the wind industry is scheduled to end this year.
In addition, with the expiration of the Treasury Department's 1603 tax grant program, many developers rushed to get their projects going before the end of the year.
Mr. Harper has run to the center, offering to lower the national sales tax, grant families direct financial aid to pay for child care and increase military spending.
He added: "Spending power in Liverpool, a combination of council tax, grant and the money you get from business rates, is being reduced by 1.3% in 2013.
Councillor Simon Wheale, the leader of Manchester's Liberal Democrats, said the cuts could have been lessened had the council done more to reduce administration costs and taken the council tax grant.
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