(provisional translation)
Outline of the Report by the Council
on the Ministry of Finance's Administration
July 17, 1998
1. Preface
The Ministry of Finance should reflect its past ways of administration and a series of unethical acts performed by its staff. The Ministry must change its administration to create a sound and effective organization and to motivate each and every employee of the Ministry.
2. Eliminating unethical actions
Raising each employee's moral standards is key to abolishing unethical behavior. For this purpose, the following measures should be taken.
1) Hold seminars on ethical issues regularly, especially for senior-level staff
2) Strengthen guidance by staff in charge of ethical codes and conduct
3) Hold high-level committee meetings on ethical codes and conduct regularly
3. Improving administrative operation
1) Revision of “administration by discretion”
Further measures to promote transparent and fair administration based on clear rules must be promoted. The overall review of financial administrative guidance is a good precedent for such changes.
2) Open administration
A) Measures should be encouraged, such as a public comment system under which a draft of proposed rules would be made public in advance and comments requested from general public.
B) Policy options, with easy-to-understand figures and simulations as necessary, should be publicized to facilitate national debate of policy issues.
C) The possibility of establishing PR officers responsible for answering questions and responding to complaints should be examined to improve administrative services for the public.
D) Transparent ways to exchange information between the private sector and the Ministry should be set up. The Ministry should cover the necessary and appropriate costs.
3) Revision of role of councils
Medium- to long-term policy orientations and general policy frameworks should be the main topics discussed by councils. Task forces consisting of a small number of experts should be widely used in the operation of councils.
4) Strengthening of overall coordination
A) Necessary measures including organizational change should be examined to strengthen overall coordination of comprehensive policy planning from a medium- to long-term perspectives.
B) Councils should exchange views to strengthen coordination among them.
Organizational management of the Minister's Secretariat should be strengthened to review organizational structures and allocate staff and budget appropriately and efficiently, and to raise staff morale, throughout the Ministry proper and its local branches.
5) Revision of research function
It is necessary to improve and strengthen the Ministry's research function, including the Institute of Fiscal and Monetary Policy. For the Institute, the possibility should be examined of inviting world-famous economists to serve as president or other senior-level staff, and of asking academics and experts in the private sector to act as advisory staff to enable the exchange of views on general economic issues.
6) Revision of public relations function
A post at Councilor-level responsible for directly overseeing the Ministry's public relations function should be created. Public relations staff should be increased and trained. Discussions should be held with the press and experts both in Japan and overseas.
7) Financial system planning administration
The Ministry should concentrate its utmost efforts on financial crisis management, including creating an appropriate framework.
4. Raising the morale of individual employees
1) Revision of training policies and encouragement of interaction between the public and private sector
A) The possibility of mid-career recruitment from outside the Ministry and exchange with university researchers and experts in the private sector should be examined.
B) To train internationally competitive staff, opportunities should be given to those eligible to acquire Ph.D.s and other degrees.
2) Liberalization of the personnel system, including recruitment
A) Competent and motivated Category 2 and Category 3 employees should be promoted more actively.
B) To avoid having too many Category 1 employees at the Ministry be graduates of a particular university, recruitment activities should be done at various universities, and the National Personnel Agency should be asked to admit a substantially larger number of applicants to the appointment examination for national public officials.
It is appropriate to ban the practice of appointing all Category 1 staff as local tax office directors once at a younger age. To have them gain experience working in the front line of the Ministry's administration, it is necessary to take measures such as appointing these young staff members to be examiners at regional tax bureaus.
C) To ensure continuity of administrative policy and to cultivate experts, the possibility of lengthening terms of office should be examined as necessary.
3) Rationalization of work environment
A) To focus on truly needed work such as planning of a policy necessary in longer-term and from wider point of view, rationalization of the internal decision-making process and outsourcing of daily routine work should be facilitated.
B) Long work hours at central government ministries and agencies related to the Diet should be reduced with the cooperation of the Diet and other parties concerned.
C) In addition to paying extra for necessary overtime work, appropriate measures to raise the morale of staff should be taken. Measures should include securing the necessary budgets to cover even insignificant expenses, such as the cost of business cards.
4) Revision of retirement ages and early-retirement practice
In the revision of retirement ages and the early-retirement practice, it is important to promote the followings: provision of posts required to raise retirement ages, revision of the relationship between post levels and salaries, and introduction of personnel and retirement control policy which allows more flexibility.