After weeks of negotiations, the ruling coalition has clinched a deal with opposition party Nippon Ishin no Kai on education reform and social insurance in exchange for its support for the minority government’s fiscal 2025 budget –– effectively ensuring its approval in the Lower House.

Prime Minister Shigeru Ishiba, who heads the Liberal Democratic Party, Komeito leader Tetsuo Saito and Nippon Ishin chief Hirofumi Yoshimura announced the three parties’ agreement in parliament on Tuesday evening.

“The kind of constructive talks and agreement we’ve struck between ruling and opposition parties are deeply meaningful for our country’s parliament. Speaking on behalf of the LDP, we will carry on with responsibility and sincerity to realize the contents of this agreement,” Ishiba said to reporters.

Executive members of each party, including the LDP’s secretary-general Hiroshi Moriyama, policy chief Itsunori Onodera and vice policy chief Yohei Matsumoto, also attended –– adding to the magnitude of the announcement.

The deal is expected to lead to an increase in government spending on public and private education from April, slash its annual health insurance costs by ¥4 trillion ($26.8 billion) a year and result in savings of ¥60,000 for each working adult every year from fiscal 2026 — two longstanding policies championed by Nippon Ishin.

On top of that, free school lunches will be available in elementary schools from April next year, while the implementation for junior high schools will begin “as soon as possible.”

Nursery school fees will also be lowered from next April.

"Supporting the fiscal-year budget as an opposition party is an extremely weighty decision," Nippon Ishin co-leader Seiji Maehara told reporters Tuesday afternoon. "We'll receive various opinions and criticisms, but we believe the fruits we have reaped will have a significant impact on society."

Nippon Ishin had initially approved the deal at an executive meeting before facing resistance from lawmakers in wider discussions.

A meeting with lawmakers that began at noon on Tuesday brought to the fore boiling discontent over the tentative deal between the party and the ruling coalition. The meeting dragged on for over two hours. It went on a break only for it to reconvene later in the afternoon.

A consensus was only reached just after 5 p.m. All party lawmakers except former general affairs committee chairman Hirofumi Yanagase voted in favor of the agreement with the government.

The deal was initially met with resistance from Nippon Ishin's Upper House lawmakers who had demanded more straightforward language on the government’s commitment to revise social insurance.

“The reform we ignited in Osaka has come so far,” Upper House caucus chairman Hitoshi Asada said at the earlier executive meeting on Tuesday morning. ”We are at the starting line of a new political phase, where we drastically change the way politics is done in parliament.”

With Nippon Ishin’s 38 Lower House lawmakers expected to vote in favor of the budget, the ruling coalition gets a brief respite even as it remains knee-deep in negotiations with a second opposition party, the Democratic Party for the People (DPP).

On Tuesday morning, the DPP met to discuss the latest proposal from Komeito to widen the pool of beneficiaries from a move to raise the threshold for tax-free income from ¥1.03 million to ¥1.78 million –– one of its core policies.

The DPP reached a conclusion that a removal of the income cap altogether along with the abolition of a temporary tax on gasoline — the details of which need to be worked out — are required for it to reach an agreement with the ruling coalition.

Acting DPP leader and tax committee chairman Motohisa Furukawa reiterated the party’s firm intention to cooperate with the government on the budget only if its requests are fully met.

”If they want to take the budget to a vote, they should come up with a proposal that meets our needs,” Furukawa said, stressing the party's support for fully abolishing any income brackets.

In its latest proposal, Komeito on Friday suggested raising the cap even to ¥1.70 million for people earning under ¥2 million, along with four other categories of exemptions for those earning more — putting the highest income threshold at ¥8.5 million.

A government-sponsored bill submitted in the ongoing session of parliament sets the cap at ¥1.23 million.

The budget committee is expected to conclude its debate within this week, but an official date for the budget to be voted on in the Lower House is yet to be determined.