Japan's Ozawa: must cut wasteful spending first

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TOKYO, Sept 1 (Reuters) - Japanese ruling party powerbroker Ichiro Ozawa, challenging Prime Minister Naoto Kan in a party leadership vote, said on Wednesday the government needs to cut wasteful spending completely before discussing tax hikes.

"We promised to carry out our policy steps by cutting wasteful spending completely before even discussing sales tax hikes ... That has not yet been achieved," Ozawa told a news conference as official campaigning for the Sept. 14 vote kicked off.

The winner of the race will likely become premier by virtue of the Democratic Party's majority in parliament's powerful lower house. (Reporting by Chisa Fujioka, Yoko Kubota and Yoko Nishikawa; Editing by Chris Gallagher)