Japan's New Finance Minister Promises To Cut Wasteful Spending, Help Families

Japan's new finance minister vows to cut wasteful spending and give money back to taxpayers to revive the country's economy. Hirohisa Fujii's comments come as the country struggles to pay down its ballooning debt.

Japanese Finance Minister Hirohisa Fujii (File)Finance Minister Hirohisa Fujii says the key to Japan's economic recovery will be a policy that puts money in the hands of taxpayers. Speaking to journalists Tuesday, he reiterated the Democratic Party of Japan's campaign promise to increase child allowances, reduce the cost of education, and cut the gasoline tax.

Fujii says the government is saying goodbye to an old concept of growth, a concept that relied on large investments on public projects, an idea that whoever is making money should make more money to help the economy.

The policy to promote domestic spending over exports is a stark contrast to previous administrations, led by the Liberal Democratic Party. The LDP relied heavily on exports to drive the economy.

Fujii blames the "export whatever you want economy" for the country's current social disparity.

Japan is the world's second largest economy, but it has suffered more than 15 years of recession or slow growth. Over the past year, it has suffered a deep recession, although the economy now appears to be growing slowly now.

To jump-start its recovery plan, Fujii says, the government has identified $98 billion worth of wasteful spending to cut. He also says the administration plans to re-allocate about $32 billion from this year's supplementary budget to go to programs that "help the public in their daily lives."

Fujii also says there is "no doubt" the dollar remains the strongest currency in the world. And, he added that Japan would continue to invest the country's foreign reserves in dollars.

All of this talk comes in the face of mounting national debt. Fujii says that Japan is in the worst financial situation among industrialized nations, because of its massive debt. But he says that solutions to those financial problems will not come before the country's economy is back on track.

He says it is important to stabilize finances but the government is not in a position to do so. The Japanese economy, he says, is not strong enough for the government to discuss ending stimulus programs yet.