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    Stasis–it’s the new reform!

    The Nikkei editors on the latest developments in “trinity reforms,” short version:

    Why are we calling something that will benefit no one “reform”?

    Ouch. Here’s where that comes from:

    In the agreement between the federal government and the ruling coalition, the transfer of funding for facilities and equipment, which had been sought by the regional governments, was partially approved for the first time. Facilities and equipment are the area in which it is easiest for regional governments to demonstrate some ingenuity in planning, so they’re part of the point of reform.

    At the trinity reform stage, reductions in federal subsidies and transfers of sources of tax money were taken care of, but reform of regional tax grants was left unattended to. Along with measures such as reductions in the number of public employees in regional government bodies, possibility of decreases in grants should be investigated.

    The subsidies the federal government provides to regional governments now add up to a burden of approximately ¥20 trillion (US $167 billion). There is no other state that intrudes on regional affairs using such gargantuan amounts of subsidy money. At ¥4 trillion in reductions in this first phase of reform, each federal ministry managed to get away with its systems and structures surviving unchanged in practical terms. This state of affairs does not deserve the name “structural reform.” The agreement between the federal government and the ruling coalition was rather vague about how reform would proceed from here on, but they must forge ahead into a second phase of reform that returns the focus to the main task.

    The regional governments’ complaint, of course, is that even if they get direct access to more money (because tax revenue goes to them directly rather than being routed through Tokyo), that doesn’t increase their discretionary power. They’re still bound to the rules set up by the federal ministries. In this aging society, that’s an especially touchy issue with livelihood protection and child care subsidies. What they fear is that cosmetic cuts in subsidies will give them no more autonomy but a lot more work to do, since they’ll have more taxes to assess, collect, and process.

    Added after a cup of tea: I might add here, for those who haven’t kept track, that the reforms about to implemented are positively revolutionary compared with those that took effect in 2001. That year, a bunch of ministries and agencies were smushed together to form new, larger bodies–the idea being that fewer official entities must make things more efficient, right? So, for example, the former 文部省 (monbushou: “Ministry of Education and Culture”) was alloyed with the 科学技術庁 (kagakugijutsuchou: “Science and Technology Agency”) to form the 文部科学省 (monbukagakushou: “Ministry of Education, Culture, Sports, Science, and Technology”–no kidding, that’s the official English name).

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