LEAD: DPJ to zero in on wasteful gov't projects, abolish key policy panel+

TOKYO, July 23 Kyodo -
(EDS: ADDING PRIME MINISTER'S REACTION, OTHER INFO)
A government led by the Democratic Party of Japan would consolidate
policymaking powers around the prime minister by setting up a national strategy
bureau under him to oversee budget compilations and foreign policies, while
creating a new body to scrap wasteful government projects, party sources said
Thursday.

The strategy bureau, which would consist of government officials and
private-sector experts handpicked by the prime minister, would replace the
Council on Economic and Fiscal Policy, currently the government's key panel
making medium- to long-term fiscal policies, the sources said.
The concepts will be included in the main opposition party's policy platform to
be unveiled ahead of the Aug. 30 general election. Opinion polls suggest that
the DPJ is well positioned to win the election and take power.
The DPJ-led government would also create what would be called the council on
administrative renovation to review central government projects, many of which
are often criticized as containing too much fat.
The new panel would be given the authority to require ministries and agencies
to provide information on projects, including those undertaken by
quasi-governmental corporations, the sources said.
If the panel determined that money would be better spent by abolishing projects
or transferring them to local governments or the private sector, it would
freeze them even in the middle of a business year.
The strategy bureau would serve to carry out the DPJ's pet projects, such as
allowances to families with children and abolishing tolls for the nation's
expressways, and would also formulate the nation's basic foreign policy, the
sources said.
The DPJ would also plan to send more than 100 of its lawmakers to ministries
and agencies so they can take initiatives in setting policies there.
Tax policies would be solely formulated by the government's Tax Commission,
while the tax policy panels of ruling parties would be abolished, the sources
said.
If ministries and agencies could not resolve differences over policy matters, a
ministerial committee involving a small number of people would be set up on a
policy-by-policy basis to smooth them over.
To overhaul the nation's public works projects, the DPJ also eyes ending the
construction of two controversial dam projects -- the so-called Yamba dam in
Gunma Prefecture and a dam on the Kawabe river in Kumamoto Prefecture --
through special legislation.
In a related move, the DPJ released a set of policies on Thursday in which it
dropped all references to the Self-Defense Forces' refueling mission for
antiterrorism coalition forces in and around Afghanistan.
The deletion has left it vague whether the party would oppose the mission's
extension beyond next January.
The policy collection, which the DPJ released, suggests the party's readiness
to be flexible in foreign policy issues, including the possible continuation of
the current approach pursued by the government of Prime Minister Taro Aso, as
the party eyes ousting his Liberal Democratic Party from power.
The document, which has summarized the policy debate within the DPJ up until
last week, will form the basis of its party platform for the House of
Representatives election.
''It is beyond my understanding that this party, which has been opposed to (the
mission) so strongly, has changed its stance shortly before the election,'' Aso
told reporters Thursday.
''I would say that is a flip-flop,'' he said, referring to the criticism
frequently leveled at himself by the DPJ.
The DPJ had opposed extending the refueling mission, conducted by the Maritime
Self-Defense Force in the Indian Ocean since 2001, past January this year in
last year's policy collection.
But DPJ President Yukio Hatoyama has said a DPJ-led government would continue
the refueling mission for the time being if it takes power, saying withdrawing
it in a rush would be reckless. ''Continuity is required in diplomacy,'' he
said last Friday.
==Kyodo