LDP Makes Deal with CDPJ

The ruling Liberal Democratic Party (LDP) reached a deal with the top opposition party, the Constitutional Democratic Party of Japan (CDPJ), on the supplemental budget for FY 2024, which Shigeru Ishiba administration submitted to the Diet on December 9th. The LDP also agreed with the Democratic Party for the People on raising threshold of individual annual income for imposing income tax from 1.03 million yen toward 1.78 million yen. As a minority government, Ishiba administration accepts any support from the opposition parties to promote its policies.

In a trilateral meeting by the leaders on Diet affairs of the LDP, its coalition partner Komeito and CDPJ, the three parties agreed on passing the supplemental budget bill in current extraordinary session of the Diet. The LDP and Komeito accepted a part of CDPJ’s demand for revising the budget, which was aimed at reducing some excessive spendings and increasing measures for reconstruction from devastating earthquake in Noto Peninsula in January.

 

It is highly unusual for the leading party to accept a demand of budgetary revision from the opposition party. There have only been four examples of budgetary revision in the post-war history of the Diet, including freezing of appropriation for a housing loan corporation by Ryutaro Hashimoto Cabinet in 1996. The supplemental budget of Ishiba Cabinet passed the House of Representatives on December 12th, and will pass the House of Councillors a few days later.

 

This is a result of compromises both by the LDP and the CDPJ. The LDP needed some votes from the opposition parties to pass the budget bill. While the LDP hoped to achieve support from the DPP, the DPP used its approval for the bill as a bargaining chip for negotiation over taxation. To obtain alternative votes from the CDPJ, the LDP accepted unusual revision of the budget bill.

 

The CDPJ had to abandon full implementation of its demand for the budget bill. It submitted its own budget bill, which reduced the spendings from 13.9 trillion yen of LDP bill to 12.5 trillion yen. But the CDPJ did not have any perspective to achieve simple majority for its bill. The CDPJ did not like the DPP to promote policy talks with the LDP, leaving the CDPJ behind. The compromise on the budget bill could be a measure for separating the LDP from DPP.

 

The LDP and Komeito made another deal with DPP on the same day. They reached a conclusion that the threshold of 1.03 million yen would be raised next year. But, it is yet determined where new threshold will be set. The agreement by those three parties for economic stimulus plan in November also did not include new threshold. The DPP failed to implement its goal of 1.78 million again.

 

The LDP is going to have policy talks with the opposition parties on each issue. If those talks become frequent, the opposition parties may compete each other in approaching the leading coalition to implement their policies, weakening cooperative relationships between opposition powers. It would be remembered that the DPP was the first one that left the framework of anti-LDP.