Trilateral Deal on Free High School Tuition

The leading coalition looks like having paved the way for passing FY 2025 budget bill in the Diet, in which it does not have a simple majority at one of two Houses. The Liberal Democratic Party (LDP) and Komeito on February 20th reacheda basic agreement with Japan Innovation Party (Nippon Ishin-no Kai) on “free education,” which Ishin upholds as its main political agenda. Ishin is supposed to vote for the budget bill in the Diet.

The LDP, Komeito and Ishin wrapped up a draft to remove the threshold set at 9.1 million yen of annual income to receive 118 thousand yen of support for high school tuition. To the students going to private high school, which generally is more expensive than public high school, the government pays additional 457 thousand yen at most, regardless the amount of annual income.

 

The cost for those changes is estimated to be 55 billion yen. The leading coalition is going to include that cost in FY 2025 budget bill and it will be approved by the House of Representatives by March 2nd, the effective deadline for the bill to pass the Diet before FY 2025 starts at April 1st.

 

The government will also introduce free lunch for elementary schools from FY 2026 and increase its support for scholarship for low-income families.

 

Since the LDP and Komeito lost in the general election of the Lower House last October, they have been looking for a partner to vote for FY 2025 budget bill. Although the first target was the Democratic Party for the People (DPP), but the trilateral discussion including the DPP was gridlocked with quarrel over the threshold for imposing income tax. While DPP demanded raising the threshold from 1.03 million yen of annual income to 1.78 million yen to expand the recipients of tax break, the LDP offered 1.23 million yen due to fiscal restriction.

 

While the discussion among the LDP, Komeito and the DPP was intermitted, Ishin promoted the discussion with the coalition parties. The co-leader of Ishin, Seiji Maehara, had close relationship with Prime Minister Shigeru Ishiba, since Maehara had been the opposition leader in Democratic Party of Japan. It is likely that Ishin took over the DPP in the race toward the leading coalition. For those opposition parties, it was necessary to implement their policy to appeal voters their achievement for their victory in the election of the Upper House in this summer.

 

Adding the requests from Ishin, FY 2025 budget bill will increase at least 200 billion yen for removing income-based threshold for high school tuition. The government of Japan is going to compensate it with cutting emergency reserve or non-urgent funds. If the coalition makes compromise to the DPP in income tax deduction, it will face further fiscal difficulty. Some staffs in the government remember “Truss shock” in the United Kingdom which caused collapse of an administration.

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