A key government panel chaired by Prime Minister Junichiro Koizumi believes spending on public works projects should be cut by 27 percent over the next five years, according to the draft of a fiscal policy proposal obtained Wednesday by Kyodo News.
The draft proposal, compiled by the Council on Economic and Fiscal Policy, features plans to cut public works spending by 10 percent in fiscal 2002 and to cut this budget a further 5 percent each year between fiscal 2003 and fiscal 2006. This would constitute a total spending reduction of 27 percent over the five-year period.
The council is expected to establish guidelines for the proposal during a meeting Friday, after which the proposal will be incorporated into a midterm economic and fiscal policy program to be unveiled by the end of the year, government officials said.
By streamlining inefficient public works projects such as road construction and river control projects, the council hopes to reduce public works spending to a level more akin to that of the United States and European countries, they said.
Domestic public works spending accounts for more than 5 percent of the nation's gross domestic product, compared with 1.9 percent in the United States and 1.4 percent in Britain.
Should Tokyo initiate a hefty cut in public works projects in line with the council's recommendations, spending on the projects will be reduced to around 3.5 percent of GDP, the officials said.
The draft proposal also states that special revenue programs for road construction should be reformed and that subsidies for public works projects in certain regions be cut during fiscal 2002 and 2003.
In terms of programs that should be be prioritized during fiscal 2002, the council believes the government should increase spending on waste disposal, urban environmental protection, universities, other national educational facilities and child-care centers.