The Japanese government has established a new organization to review its subsidies and taxation as part of Prime Minister Sanae Takaichi’s effort to pursue economic growth through what she calls “wise spending,” the Finance Ministry said.

The entity, dubbed the Japanese version of the U.S. Department of Government Efficiency, widely known as DOGE, will be led by Finance Minister Satsuki Katayama, who is also in charge of special measures on taxation and reviewing subsidies.

Its launch comes at the demand of the Japan Innovation Party, the reform-minded junior coalition partner of the ruling Liberal Democratic Party. In October, the two parties agreed to create such a body as a condition for forming their alliance.

Katayama said the government will not present a near-term goal for the organization, citing ongoing work to compile the initial budget for the next fiscal year starting in April.

However, Katayama said that the body’s proposals will be fully incorporated into the spending plan for fiscal 2027.

The organization will use social media to gather views on which subsidies and tax privileges are seen as wasteful, Katayama said, adding, “I think it would be very good to solicit opinions from the public.”

Takaichi, a proponent of expansionary fiscal outlays, aims to pursue economic growth through investment in key industrial areas such as shipbuilding and artificial intelligence.

Amid concerns about Japan’s deteriorating fiscal health due to potential massive spending, Takaichi, who took office last month, has stressed the importance of “wise spending” under her slogan of “responsible and proactive” public finances.

Last week, the government approved an economic package worth around 21.3 trillion yen to tackle rising living costs, featuring subsidies for electricity and gas bills as well as cash handouts for children.

Chief Cabinet Secretary Minoru Kihara said the government’s supplementary budget for fiscal 2025 will finance the package.

© KYODO