The fiscal 2021 budget cleared the House of Representatives on Tuesday, providing temporary relief for Prime Minister Yoshihide Suga, who has been hit by scandals over ethics violations at two ministries and criticism over his coronavirus response.
The Liberal Democratic Party and Komeito coalition were in favor of passing the record-shattering ¥106 trillion budget, with the largest component being social welfare at ¥35 trillion. Lower House approval means the budget will be enacted starting April 1 without interruption, owing to the house’s superior status over the House of Councilors.
Opposition parties were against the financial blueprint for the upcoming fiscal year but did not seek to obstruct debate schedules at the Diet, after obtaining concessions over their inquiries into conflicts of interest at the Ministry of Internal Affairs and Communications and bribery at the agriculture ministry.
The budget funds two of Suga’s signature projects: achieving carbon neutrality by 2050 and promoting digitalization. The administration is hoping for a reset by securing funds for important — and personal — policy goals, in the process getting itself back on a positive trajectory ahead of an election that must be held by October.
“This budget reliably deals with mid- and long-term issues … such as promoting environmental friendliness and digitalization, which are the driving forces of future growth and achieving a sustainable economy led by private sector demand,” said Kenji Yamada, an LDP lawmaker, in support of the proposal Tuesday morning at the Lower House Budget Committee.
The one-two punch of recent scandals has knocked Suga’s popularity.
A bribery scandal involving former agriculture minister Takamori Yoshikawa led to six officials being disciplined, and revelations that 13 current and former communications ministry officials were treated to expensive dinners by a satellite broadcast company’s executives, including Suga’s eldest son, added fuel to the fire. One of the officials was Makiko Yamada, who until this week was the Cabinet public affairs secretary in the Suga administration.
Initially, opposition parties hinted they would not cooperate with the ruling coalition on passing the budget unless they could question key witnesses on those scandals. Although the purpose was essentially to name and shame them in public, the ruling coalition partially acquiesced in a bid to draw a line under the controversies and move on from the damage.
At the same time, the opposition forces were also said to be worried about a public backlash over delaying approval of the budget, which would have opened them up to accusations of playing politics at a time when the nation is in a precarious situation due to COVID-19. The budget sets aside ¥5 trillion as a novel coronavirus measure reserve fund.
The ruling coalition allowed Masaaki Edamoto, a vice minister at the agricultural ministry who was one of the officials reprimanded over ethics lapses connected to the bribery scandal, to be summoned to the Diet as an unsworn witness. Yamada, who was a vice minister for policy coordination with communications businesses at the Ministry of Internal Affairs and Communications when she was treated to a ¥74,203 meal by the satellite broadcasting firm in 2019, resigned from her position as press secretary for health reasons Monday. The opposition had called for her to step down last week.
Deeming that the administration had been sufficiently hurt politically, the opposition camp reversed direction and agreed to a vote on the budget while still opposing it. How much damage the controversies have caused Suga will be reflected in upcoming polls.
Meanwhile, the administration aims to see a rally in its approval ratings with the budget’s passage, hoping to put the misconduct in the rear-view mirror and start debates on major legislation that is particularly important for Suga.
Specifically, the administration has identified efforts over digitalization and carbon neutrality as two integral ways to woo back voters disillusioned by the government’s inflexible coronavirus response and the dual scandals at the government ministries. The Cabinet’s approval ratings had been plummeting before apparently bottoming out in multiple polls conducted last month.
Suga wants to institute a specialized government agency overseeing digitization across government organizations starting Sept. 1. The budget allots roughly ¥300 billion to the initiative, roughly 40% of the entire government’s budget for investment in information technology systems.
The government has earmarked ¥466.3 billion to support the development of hydrogen power, solar power and storage batteries, as well as increase energy efficiency in supply chains. The money will be also spent on technological innovation in fuel-cell vehicles and electric vehicles. It is separate from a ¥2 trillion fund that was part of the third supplementary budget.
The prime minister said in January’s policy speech that environmental measures are opportunities to transform the country’s industrial structure and stimulate economic growth.
“The administration will use all policy tools available, including global cooperation to standardize the popularization of new technologies, and dedicate all of its strength to achieving a decarbonized society,” Suga told the Lower House Budget Committee on Tuesday morning.
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