March 6, 2025
TOKYO – It can be said that the minority ruling parties were at the mercy of opposition parties competing to win public favor, as those parties sought increases in benefits or tax cuts with this summer’s House of Councillors election in mind.
One cannot help but be concerned about whether the ruling parties will continue to manage their political affairs without regard to the need for measures or financial resources in order to maintain the administration.
The budget proposal for fiscal 2025 and revised tax-reform related bills passed the House of Representatives with a majority of votes from the Liberal Democratic Party, Komeito, the Japan Innovation Party and others. The JIP voted in favor of them based on the fact that the party’s requests for free high school tuition and other measures were reflected in the revised bills.
This is the first time in 29 years that the initial budget proposal has been revised in the Diet since 1996, when the administration of then Prime Minister Ryutaro Hashimoto temporarily froze the injection of taxpayers’ money for the disposal of bad loans.
This time, the total amount of general account spending was reduced by about ¥340 billion to ¥115.2 trillion. This reflected a decrease in tax revenues due to raising the “annual income barrier,” the threshold for the imposition of income tax.
A revision was also made to limit the growth of expenditures due to the inclusion of free high school tuition by reducing reserve funds.
As a result of such accounting adjustments, the government apparently avoided issuing additional government bonds, but it will be difficult to continue having both free high school tuition and tax cuts without permanent financial sources in the next fiscal year and later. These burdens could be passed along to future generations.
Under a constitutional provision, a budget proposal is automatically passed within 30 days after it is sent to the upper house. The government and the ruling parties aimed to pass the proposal in the lower house by a deadline of March 2 as the new fiscal year starts on April 1, but they could not meet the deadline because they spent much time on discussions with the opposition parties. Depending on deliberations in the upper house, they will have to compile a supplementary budget.
Without the cooperation of opposition parties, the minority ruling parties of the administration of Prime Minister Shigeru Ishiba cannot pass a budget proposal or approve a treaty. For this reason, some hoped for the realization of a “Diet of deliberative debate,” in which the ruling and opposition parties would discuss the effectiveness of policies and how to finance them and find points of agreement.
In reality, however, such essential discussions were left behind. It is extremely irresponsible that the ruling parties were so eager for the cooperation of opposition parties that they scrambled to secure sufficient support, while opposition parties were clinging to their stance of trying to realize policies that would be popular with the public. This is far from a partial coalition.
The Constitutional Democratic Party of Japan opposed raising the maximum amount of co-payments for patients under the high-cost medical expense benefit system, which will be implemented in stages starting this summer. Ishiba stated that the increase would be implemented as scheduled this summer, and that the plan in the summer of 2026 and later would be reconsidered.
The increase in the maximum amount under the system is intended to reduce the burden of insurance premiums on working-age generations, among other purposes. However, there is no denying that this plan was too abrupt. Deliberations should proceed carefully while listening to patients’ organizations and other entities.