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The government should not use public works projects to help stimulate the dormant economy, and the process of implementing such projects should be reformed substantially to make them more transparent, the Japan Association of Corporate Executives (Keizai Doyukai) said Monday.

A proposal by Keizai Doyukai’s committee on fiscal policy criticized the government for increasing budgetary allocations for public works projects following recent calls for greater stimulus measures.

According to the committee, such moves will run counter to the government’s original plan for fiscal structural reform. The committee said construction bonds and deficit-covering bonds should no longer be used for this purpose, saying the bonds were used when Japan needed to boost construction projects to build necessary social infrastructure. “The period of promoting public works projects is over,” said Shuichiro Yamanouchi, vice chairman of the committee and chairman of East Japan Railway Co.

Yamanouchi added that the government’s projects lack efficiency and tend to provide benefits for only a handful of people in the construction business. The committee urged the government to review existing long-term plans for public works projects in Japan since they deprive the government of its budgetary flexibility.

The government should also abolish special funds that are designed to pool money for specific purposes such as road construction, it said. The panel’s proposal also says that the central government’s involvement in public works projects should be reduced by reforming the current system of distributing subsidies to regional governments.

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