Japan’s new scheme reviews outdated subsidies and tax breaks to address fiscal concerns, led by Finance Minister Satsuki Katayama
TOKYO: Japan has launched a new scheme to cut wasteful government spending by reviewing existing subsidy projects and investment funds.
The initiative aims to alleviate market concerns over the country’s expansionary fiscal policy amid growing debt.
Finance Minister Satsuki Katayama leads a team of officials from multiple ministries tasked with identifying outdated or unnecessary tax-break and subsidy programmes.
“Unlike DOGE, we’re not aiming to overhaul government organizations,” Katayama told a news conference.
She explained that the focus remains on reviewing existing subsidies, tax break schemes and government fund usage.
“To maintain trust in the sustainability of Japan’s finances, it’s very important to show the public how we are always looking into how we spend,” she said.
While some subsidies may face immediate cuts, findings will be more thoroughly reflected in fiscal 2027 budget deliberations starting around April through June next year.
The government plans to collect public opinions via social media regarding wasteful or questionable subsidies and government schemes.
No specific target has been set for the spending cuts.
Prime Minister Sanae Takaichi’s cabinet recently approved a 21.3 trillion yen (USD 136 billion) economic stimulus package.
This expansionary fiscal approach has triggered selloffs in the yen and Japanese government bonds.
The spending review initiative reflects the strong focus of her ruling coalition partner Ishin on cutting red tape and streamlining government operations. – Reuters
