Japan Enacts 3.1-T.-Yen Extra Budget for FY 2026

Tokyo, June 5 (Jiji Press)–Japan’s parliament Friday enacted a 3,113.5-billion-yen supplementary budget for fiscal 2026 to finance measures to address concerns over crude oil supplies from the Middle East. At a plenary meeting, the House of Councillors, the upper chamber of the Diet, passed the draft budget by a majority vote, with support from the ruling Liberal Democratic Party and its junior ally, the Japan Innovation Party, as well as the Democratic Party for the People and Team Mirai on the opposition side. The Constitutional Democratic Party of Japan, Komeito, Sanseito, the Japanese Communist Party and Reiwa Shinsengumi opposed the budget. The supplementary budget, which on Thursday passed the House of Representatives, the lower chamber, will be financed entirely with deficit-covering bonds. Of the general-account expenditures, 2.5 trillion yen will go to a new reserve fund to deal with problems related to the Middle East situation, which is intended to boost financial resources for gasoline subsidies. About 513.5 billion yen will be used to expand the general reserve fund so that the government can provide fresh financial support to curb electricity and gas bills. At an Upper House Budget Committee meeting earlier Friday, CDP and other lawmakers criticized the budget, saying that it is composed mainly of reserve funds whose uses are not clearly specified. They called for revising the draft budget to include benefits for low-income and child-rearing households. Prime Minister Sanae Takaichi rejected this. “Various support measures have already been taken,” she said. The outlook remains unclear for negotiations aimed at ending the fighting between the United States and Iran. If the conflict is prolonged, the government will likely need to consider an exit strategy for its livelihood support measures, including a review of gasoline subsidies resumed in March. Meanwhile, the current Diet session ending on July 17 is in its final stage. The focus is on the fate of important legislation, such as a bill to revise the Code of Criminal Procedure for retrial system reform, being discussed in the Lower House, and a bill to establish the crime of damaging the national flag, which the ruling parties aim to submit. END [Copyright The Jiji Press, Ltd.]