Japan on Tuesday rolled out a new initiative to curb unnecessary government expenditure by reassessing a wide range of existing subsidy programmes and state-backed investment funds. The government hopes the cost-cutting review will help ease market worries surrounding its increasingly expansionary fiscal strategy.
A Japanese DOGE
Japan on Tuesday launched a scheme aimed at cutting wasteful government spending by reviewing existing subsidy projects and investment funds, a move the administration hopes will alleviate market concern over its expansionary fiscal policy.
The idea, dubbed by some analysts as the Japanese version of U.S. President Donald Trump’s Department of Government Efficiency (DOGE), is among Prime Minister Sanae Takaichi’s priorities to convince the public her government is taking a careful approach on spending to avoid increasing Japan’s already huge debt.
Ensuring Public Trust
Finance Minister Satsuki Katayama said on Tuesday she is leading a team, consisting of officials from the finance and other ministries, tasked with identifying tax-break and subsidy programmes that have become outdated or unnecessary.
“Unlike DOGE, we’re not aiming to overhaul government organizations” but instead the focus is on reviewing existing subsidies, tax break schemes and usage of government funds, Katayama told a news conference.
“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 the review may lead to immediate cuts to some subsidies, its findings will be reflected more thoroughly in deliberations on the fiscal 2027 budget that begins around April through June next year, Katayama said.
Public Input Through Social Media
The government plans to collect opinions from the public through social media on which subsidies or government schemes are seen as wasteful or questionable, she said. There will be no target set on the spending cuts, she added.
Takaichi’s cabinet approved a 21.3-trillion-yen ($136 billion) economic stimulus package on Friday, highlighting her expansionary fiscal streak that has triggered a selloff in the yen and Japanese government bonds.
The initiative aimed at cutting wasteful spending reflects the strong focus of her ruling Liberal Democratic Party’s coalition partner, Ishin, on cutting red tape and streamlining government operations.
(With inputs from Reuters)
