Japan's Lower House Passes Initial Budget for Fiscal 2025
Prime Minister Shigeru Ishiba breathed a sigh of relief as the Lower House of Japan's Diet passed the initial budget for fiscal 2025. The bill garnered majority support from the ruling Liberal Democratic Party (LDP), its coalition partner Komeito, and the opposition Nippon Ishin (Japan Innovation Party).
Despite revisions that reduced the original amount by 343.7 billion yen, the general account in the proposed budget remains the largest ever at 115.1978 trillion yen ($773.2 billion). The coalition, which lost its Lower House majority in the October 2024 election, needed to secure support from Nippon Ishin to ensure the budget's passage before the end of the current fiscal year.
In a historic first since the Ryutaro Hashimoto Cabinet in 1996, the Diet revised the initial budget bill. This also marks the first time in 70 years, since the Ichiro Hatoyama Cabinet in 1955, that the Diet reduced the initial budget amount.
The revisions included adopting measures to provide free high school education, a key demand of Nippon Ishin. This marks the first time since the party's entry into national politics in 2012 that it has voted in favor of the government's initial budget proposal.
Under the revised budget, the income limit for families to receive education subsidies of up to 118,800 yen per year for public and private high schools will be removed from fiscal 2025. Additionally, the minimum annual taxable income will be raised from 1.03 million yen to 1.6 million yen.
While the main opposition parties, the Constitutional Democratic Party of Japan and the Democratic Party for the People, opposed the budget due to disagreements over revising the high-cost medical expense cap and the "1.03-million-yen barrier," Ishiba's minority government successfully cleared its biggest hurdle in the first half of the Diet session.
However, challenges remain. The administration must address the unresolved scandal over unreported political funds in the LDP, including the potential abolishment of donations from companies and organizations. Additionally, the Diet is expected to debate the issue of allowing married couples to register under separate surnames.