Japan reboots DOGE-style spending review in hunt for funds for Takaichi pledges
EWJ•Japan will widen its spending review to examine 201 special-purpose government funds holding an estimated 7 trillion yen ($44.35 billion), seeking funding for Prime Minister Sanae Takaichi’s pledges. The review follows an earlier effort that proposed abolishing just three of roughly 120 tax breaks.
1. Wider review of public funds
Japan’s government said it would reboot its DOGE-style spending review, focusing on special-purpose public funds as it looks for money to support Takaichi’s policy pledges. The government wants idle or long-unused balances returned to the national treasury and stricter cost-benefit assessments of subsidy programs.
2. Funding and fiscal pressures
The 201 funds are estimated to hold around 7 trillion yen at the end of the next fiscal year. Review findings are expected to feed into year-end tax reform talks and budget negotiations, including plans for a consumption tax cut on food from April 2027 and spending demands for defense and industrial policy.
3. Debt and spending debate
Japan’s 10-year government bond yield has reached multi-decade highs amid concerns that Takaichi’s plans may increase debt issuance and strain public finances. Takaichi has vowed to cap new debt issuance at around 40 trillion yen, while spending requests for next year’s budget reached a record 143 trillion yen. An economist said using funds and subsidies to finance a consumption tax cut could shift resources away from supply-side measures.
