Short of a majority in the Lower House, the ruling Liberal Democratic Party-Komeito coalition is concentrating its efforts on passing its budget by March 2 to give Prime Minister Shigeru Ishiba much-needed oxygen and help him navigate the latter half of the parliamentary session slated to last until June 22.
The budget for a new fiscal year automatically becomes law 30 days after its approval in the Lower House, according to Japan's Constitution, regardless of the outcome of debates in the upper chamber of parliament.
Negotiations over the minority government’s proposed budget for fiscal 2025 reached a turning point Friday, with the ruling coalition expediting discussions to secure external approval and the opposition eager to leave its own mark in the debate.
“There are still some gaps, but we have narrowed down the focus of the negotiations,” LDP policy chief Itsunori Onodera told reporters Friday morning after meeting with his Komeito and Nippon Ishin no Kai counterparts. “So I believe we should make an effort to work together and reduce those gaps.”
After over a month of discussion on education reform, the coalition is hastening to bridge the gap with Nippon Ishin — the second-largest opposition party in the Lower House, with 38 seats — with the aim of clinching its support in exchange for policy concessions.
Nippon Ishin has long requested private education subsidies of up to ¥630,000 ($4,130) per year, the same amount currently guaranteed in Osaka Prefecture, which the party governs. The party has also pushed for a revision of social insurance and the establishment of a legal framework to make sure a potential intra-party agreement is respected.
Under the current system, subsidies for households with annual incomes below ¥9.1 million with children attending public high schools are set at ¥118,000. Meanwhile, families with income below ¥5.9 million with children attending private schools benefit from subsidies of up to ¥396,000 a year.
Onodera revealed the coalition is considering higher benefits for private high school education from fiscal 2026, in addition to an extension of subsidies initially allocated only to public education — a de facto concession to Nippon Ishin. The coalition’s initial plan did not include an increase in the direct outlays to families.
An hour prior to Friday morning's meeting with Nippon Ishin, in the same building, the Constitutional Democratic Party of Japan unveiled its own proposal for an amendment to the government’s budget draft, in what is seen as a conciliatory move to the ruling coalition.
In a news conference, CDP leader Yoshihiko Noda commended his party’s efforts in scrutinizing the government’s proposal and working to present its own alternative.
“We have serious intentions to get into power, so when we present policies, we need to think carefully about the financial resources needed,” Noda said, emphasizing his commitment to negotiating with the coalition. “It’s like training to take power.”
The CDP said approximately ¥3.8 trillion of the proposed budget could be reallocated toward reducing the burden of the gasoline tax, higher spending on education and pay raises for medical and school staff, by making use of portions of reserve funds set aside in previous years that have not been used, a practice the party deemed "inefficient."
Noda underscored the fact that the CDP is not pushing for the issuance of additional government bonds, although he admitted that once all of the party's requests are taken into account, the budget total would increase to over ¥118 trillion from the current ¥115 trillion.
Later on Friday afternoon, CDP policy chief Kazuhiko Shigetoku presented the party’s blueprint to the policy chiefs of the ruling coalition. Discussions on the CDP proposal are expected to kick off next week.
Should the government accept an amendment to its budget proposal for the next fiscal year, it would be the first in 29 years.
Since losing its majority in last year's Lower House election, the ruling coalition has been forced to conduct negotiations with the opposition to clinch support for every bill.
”The LDP said we should trust them, but we need to find a way to make sure a potential agreement is abided by, and measures are implemented,” Nippon Ishin policy chief Hitoshi Aoyagi said Friday.
Nippon Ishin leader Seiji Maehara, having revealed that he has been in contact with Onodera over the past week, said his party will make its final decision on the budget next week.
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