FY2026 Budget Bill Passes the Diet

Annual budget bill for fiscal year 2026 passed the Upper House of the Diet and enacted on April 7. Although Prime Minister Sanae Takaichi tried to catch up the deadline of budget bill to be enacted at the end of March, the Liberal Democratic Party (LDP) failed in meeting her demand, due to consumption of time caused by Takaichi’s abrupt decision to have a snap election in February. Takaichi must have realized current situation in which she does not have a majority in one of the two chambers of the Diet. 

FY2026 budget bill includes 122 trillion yen of spendings, which marked the greatest size ever. Spendings for defense exceeded 9 trillion yen for the first time. It does not include measures to stabilize people’s life that is suffering from price inflation caused by military attack in Iran by the United States and Israel. Takaichi argued that the budget would contribute to build a “strong economy” based on her concept of “responsible and proactive public finances.”

 

The discussion over the budget bill finished in extremely short period of time in this Diet session. The Lower House ordinarily starts discussion over the annual budget in late January and pass it over to the Upper House around the end of February. The Upper House further discusses it through March. Eighty-hour discussion is a normal requirement in the Lower House and the Upper House spends 70 to 80 percent of time of the Lower House’s length.

 

However, the discussion started in late February this year, because Takaichi decided to dissolve the Lower House in January and have an election to increase LDP seats. The result of the election, or LDP’s sweeping victory, made Takaichi boasted to the extent to believe that she could make an impossible possible. Pushed by the ruptured prime minister, the LDP in the Lower House accelerated the discussion of budget bill, using its majority power. The bill passed the Lower House with ever shortest discussion for fifty-nine hours.

 

That coercively fast procedure made the discussion in the Upper House back to the normal. The Upper House spent about the same length of time as the time of Lower House. Consequently, the budget bill could not pass the Upper House by the end of March and Takaichi government had to form an interim budget for early April. After LDP’s effort to get support from some lawmakers in the opposition powers, the bill passed with majority. Two lawmakers with Japan Conservative Party and four independent lawmakers voted yes to the budget bill in the Upper House fulfilling a simple majority.

 

It is likely that Takaichi cannot have unilateral procedure in the rest of current session. She has some conservative agenda to discuss, including reinforcement of intelligence community in the government or export of weapons. While there is a provision in the constitution that two-third majority in the Lower House can override a decision of the Upper House, Takaichi will have to take care of opposition parties in the Upper House to have smooth procedure of those bills.

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