Japan mulls cuts in govt staff, pay

Tokyo, Nov 14 | Updated: Nov 15 2005, 05:30am hrs
Japanese ministers and policy advisers called on Monday for cuts in both the number and total salary of the countrys civil servants to help limit government expenses and restore ailing state finances. The Council on Economic and Fiscal Policy, including cabinet ministers, academics and business leaders, agreed the government should halve the total payrolls for its employees as a proportion of nominal GDP (gross domestic product) within the next decade.

We propose drastic cuts to the government payroll, by radically cutting the total number of civil servants and enacting bold reforms in the payroll system, the council, which is the governments top economic advisory group, said in a draft report. The report suggested cutting the number of workers on central government payrolls, currently around 687,000 excluding postal workers, by more than 5% in the next five years. It also urged changes to civil servants remuneration system to ensure salaries reflect workers abilities rather than being automatically calculated based on the number of years served. The proposals are expected to eventually be adopted as official government policy, although minor changes are likely.

Most of the cuts are likely to be made over time and through attrition, or by not replacing those who retire, but the move would nonetheless be a symbolic triumph for Prime Minister Junichiro Koizumi, who is urging spending cuts in areas previously considered sacrosanct.

Japanese government jobs have long represented stability, compared with the private sector, where employment and salaries have only recently started to recover after the economys emergence from a decade-long slump.

-Reuters