The waste-cutting panel of the Hatoyama administration's Government Revitalization Unit has finished its first round of work and now moves on to the second round. In the work completed, the panel reviewed funding allocations for some 240 projects included in the fiscal 2010 budgetary requests, which top ¥95 trillion in total, and managed to cut expenditure by some ¥450 billion. It also called for funds set up by independent administrative agencies and surpluses in special accounts, which total some ¥900 billion, to be returned to state coffers.

The review of each project saw panel members, including Democratic Party of Japan lawmakers and experts from the private sector, spend about an hour listening to and questioning relevant officials. Projects were divided into categories, such as "abolish," "reduce," "freeze" and "conclusion postponed."

While the panel's work was praised for bringing transparency to the budgeting process, the relatively short time spent on examining each project attracted criticism, as did the panel's style — dubbed by some people as "a sort of public execution" due to some panel members' superior attitude toward project officials. But since tax revenue in fiscal 2009 and 2010 is expected to be less than ¥38 trillion and ¥40 trillion respectively, panel members should continue to closely scrutinize funding requests.

But decisions by the panel are not final. Its reviews are to be followed by negotiations between the Finance Ministry and Cabinet members. This process should also be transparent.

The government must do its utmost to eliminate waste and increase efficiency, but it should assess certain projects with a long-term view towards rectifying the gap between rich and poor and strengthening the economy. Careful political judgment will be required in such areas as grants in aid from the central government to local governments, remuneration for medical institutions and spending for U.S. forces in Japan. The government should also pay due attention to preventing a second economic dip. Prime Minister Yukio Hatoyama's leadership will be tested.