Prime Minister Junichiro Koizumi's initiative to give local governments more fiscal autonomy -- part of his structural reform agenda -- is meeting stiff resistance from the central bureaucracy. The plan calls for seven ministries to cut a total of 630 billion yen in subsidies provided by the state. The response has been tantamount to rejection: Five ministries have agreed to cut only 28.9 billion yen, and two others (land and transport, and education and science) have offered practically no concessions.
Bureaucrats are prone to conformity. Usually, a ministry in a prominent position sets the pace for other ministries involved. This time around, the pacesetter has been the Ministry of Health, Welfare and Labor, which has offered a small subsidy cut of 10.9 billion yen -- a far cry from the 504 billion yen requested by the Prime Minister's Office.
On the other hand, the health ministry has made a proposal of its own to local governments: to reduce more than 900 billion yen in subsidies, including cuts in the central government's share of welfare payments to needy people. The arithmetic involved here -- one that would likely benefit the health ministry -- needs a little explaining.