Editorial: Root out wasteful spending of tax revenues

November 19 , 2020

Government bureaucracies must stay ever vigilant and diligent in extirpating tax outlays that are unnecessary or wasteful. On November 10, the state watchdog Board of Audit released its audit of government activities for fiscal 2019, identifying 248 cases of either tax dissipation valued at some 29.7 billion yen or specifying areas requiring reform.

While the number of cases was the fewest reported in the past ten years, the decrease was merely due to the pandemic, which curtailed Board audits to just 60% of previous years. Among the worst offenders in 2019 was the Ministry of Land, Infrastructure and Transport at 10.1 billion yen, followed by the Foreign Ministry at 5.7 billion yen and the Ministry of Health, Labor and Welfare at 4.3 billion yen.

The claim to the single worst outlay was laid on the Foreign Ministry, which channeled 5.7 billion yen to the Japan-China Friendship Center, a quasi-public entity, in fiscal 2016. The money was ostensibly for a good purpose—to fund initiatives to combat PM2.5 smog particles created by “yellow sand” and forestation projects in Southeast Asia. Regrettably, not a single project has been launched over the past four years, making the entire venture highly suspect.

Another spending watchdog worthy of note is the annual review of public sector operations, which began from fiscal 2013 under the direction of the coalition government partnered by the Liberal Democratic Party and Komeito. The review examines some 5,000 state activities and can designate their reform.

Execution of budgeted outlays by agency are shown on a publicly disclosed review sheet, which is then reevaluated by a government services reform committee chaired by the prime minister. The committee consists of experts who examine 13 review fields that include everything from the procurement of Japan’s next-generation stealth fighter to poverty issues that children face and state financing of smaller businesses. This year, the entire process could be seen over a live webcast.

The key, of course, is to ensure that the paring of unneeded spending is properly reflected when formulating the national budget for the coming fiscal year. Only by undertaking these measures, step by step, can the government hope to gain the trust and confidence of its taxpayers.