Lower House OKs ¥90 trillion 2012 budget but deadline delays loom

by Natsuko Fukue

Staff Writer

The Lower House passed a ¥90.3 trillion budget for fiscal 2012 on Thursday, ensuring the legislation will be enacted, but the opposition camp could still prevent it from entering into force before the new fiscal year starts.

Given the tight deliberation schedule in the opposition-controlled Upper House, the budget is unlikely to clear the chamber in time to be enacted by March 31, the final day of fiscal 2011.

Any such delay would force the ruling Democratic Party of Japan to submit a provisional budget to the Diet to cover a budgetary gap from April 1, the start of the new fiscal year.

It would be the first time a government has had to resort to a provisional budget in 14 years, underlining Prime Minister Yoshihiko Noda’s difficulties in the divided Diet.

When the two chambers are split over a budget’s passage the powerful Lower House’s vote trumps any opposition from the House of Councilors.

Even in cases when the Upper House decides to vote down a budget, it is still automatically enacted within 30 days, based on the Constitution.

The DPJ initially had hoped the budget would clear the Lower House by March 2 so it could be enacted automatically before the start of fiscal 2012. But opposition parties refused to cooperate, delaying deliberations in the Lower House.

In the end, the government persuaded the opposition camp to accept a compromise deal that saw a special bill to issue deficit-covering bonds split off from the main budget. Under the agreement, this will now be treated as a separate piece of legislation, as was the case last year. As the bond bill will fund about 40 percent of the 2012 budget, its enactment is essential.

Last year, the bond bill was enacted as late as August and only after Noda’s predecessor, Naoto Kan, announced his intention to step down.

Also on Thursday, the Lower House passed a special bill to aid Fukushima Prefecture residents, whose lives have been shattered by the nuclear disaster.

The bill would oblige the central government to carry out public works projects for municipalities in the prefecture, create special tax breaks for businesses that had offices in the evacuation zones, and provide assistance in checking contamination levels.

The government hopes the bill will help ease at least some of the anxieties Fukushima’s disaster-hit residents are experiencing.