The government has adopted a plan to consolidate and streamline its 102 independent administrative agencies. Six entities will be abolished or privatized and 16 others will be integrated into six entities. Many of the entities affected are small, like research institutes. The government should continue a thorough review of independent administrative entities, for which the government has been providing funds amounting to ¥3.5 trillion annually. As a result of the plan, government spending for those entities in the fiscal 2008 draft budget will be reduced by some ¥156.9 billion, or only about 4.5 percent.
In August 2007, then Prime Minister Shinzo Abe adopted a policy statement that the government would scrap all independent administrative entities except those that are "truly indispensable." A government panel also recommended that 11 entities be abolished or privatized. The adopted plan appears substantially reduced from the earlier goal.
Attention had been placed on what the government would do with two bigger entities — the Urban Renaissance Agency, which has some 4,000 workers, and the Japan Housing Finance Agency, which annually receives more than ¥300 billion from state coffers. But discussions on privatization will be concluded within three years for the former and two years for the latter.
The government has rationally decided that independent administrative agencies in principle must use a public tender, abolishing private contracts. A 2005 survey of 40 such entities showed that 90 percent of their contracts were private. The government will also move to reduce salaries of some entity heads.
Prime Minister Yasuo Fukuda is of the opinion that entities really helpful to people, such as the National Consumer Affairs Center of Japan, should be strengthened. This is a reasonable and understandable argument. But the government must do its utmost to rid the public sector of wasteful spending. This is what bureaucrats do not dare to do.