Japan Lower House Dissolution to Delay Budget Passage

Tokyo, Jan. 19 (Jiji Press)–The Japanese government is unlikely to secure the passage of its fiscal 2026 draft budget by the March 31 end of the current fiscal 2025, after Prime Minister Sanae Takaichi announced on Monday her decision to dissolve the House of Representatives on Friday for a snap general election. Following the dissolution of the all-important lower chamber of the Diet, the country’s parliament, which comes on the opening day of this year’s ordinary Diet session, the government is set to compile a stopgap budget for first time in about a decade to cover essential spending until the full budget for the year from April is enacted. It remains unclear, however, flagship measures of the ruling coalition, led by Takaichi’s Liberal Democratic Party, can be implemented on schedule. The country’s ordinary Diet session is normally convened in January to deliberate the state budget for the new fiscal year and tax-related bills, which all directly affect people’s lives. Deliberations on the government’s budget for a fiscal year usually take about two months, from the submission of the bill on the opening day of the ordinary session to its enactment before the March 31 end of the previous fiscal year. That timeline would collapse if the Lower House is dissolved and a general election is held. “There is no way (the fiscal 2026 budget) can be passed within fiscal 2025,” a senior Finance Ministry official said. Japan compiled a provisional budget for 50 days in 2013 and for 11 days in 2015. As deliberations on such budgets are largely procedural, spending is typically limited to minimum needs, making it difficult to earmark funds for new policy measures. The Takaichi administration, which was launched last October, plans to make high school education and elementary school lunches free starting in April. Unless the fiscal 2026 budget is passed by March 31, local governments would be forced to temporarily cover the costs, potentially causing administrative disruption. The implementation of other signature policies, including the abolition of the environmental performance tax on vehicle purchases and the provisional gas oil tax surcharge, would also be postponed. Finance Minister Satsuki Katayama said at a press conference Friday that the government “will do everything possible to ensure there is absolutely no negative impact on people’s lives.” END [Copyright The Jiji Press, Ltd.]