Japan’s Annual Budget Bill Passes the Lower House

Japan’s Annual Budget Bill Passes the Lower House

By Takuya Nishimura, Senior Fellow,  Asia Policy Point
Former editorial writer for the Hokkaido Shimbun
You can find his blog, J Update here.
March 16, 2026
 
The Lower House passed the FY2026 budget bill and sent it to the Upper House on March 13. To prove that her decision to dissolve the Diet and to hold a Lower House snap election in February did not interfere with work on the national budget, Prime Minister Sanae Takaichi needs the Diet to approve the budget by the end of March.  She has pushed the leading parties – the Liberal Democratic Party (LDP) and the Japan Innovation Party (JIP) – hard to accelerate the budget process. With the LDP’s supermajority, the bill cleared the Lower House with extraordinary speed on March 13. It is still unclear, however, whether the Upper House will act by the end of March, as the prime minister hopes.
 
The Diet’s process for considering the annual budget bill ordinarily takes two months or more. The dissolution of the Diet and the ensuing campaign set back work on the FY2026 budget by a least a month. Takaichi has attempted to accelerate the process and pass the FY2026 budget bill inside of a month. The government should have an approved budget in place before the fiscal year begins on April 1. Hence Takaichi’s self-imposed March 31 deadline. It is a hard deadline even though Takaichi gave a month away last January.   
 
The first step in the annual budget process is for the administration to submit a budget bill to the Lower House, as Article 60 of the Constitution of Japan requires. The Committee on the Budget of the House then begins its review. For the first three days, senior members of each party put questions to the prime minister. After that, rank-and-file members discuss the budget in greater detail; the premier may or may not be present at these sessions. On the theory that the budget is related to every political issue, the questions range widely, extending even to the scandals of the leading parties.
 
This year the Takaichi Cabinet submitted the FY2026 budget bill to the Lower House on February 20. The House’s Committee on the Budget commenced discussions on February 27. The three days for questions from the senior members were February 27, March 2 and 3. The opposition parties agreed on this schedule proposed by the leading parties.
 
However, the rest of the schedule was at the discretion of the chairman of the committee, Tetsushi Sakamoto, an LDP member, including the decision to end debate and bring the bill to a vote. He decided that the committee would hear from each ministry on its policies on the budget bill from March 4 to 6. The committee then had a local public hearing on March 8 and a public hearing in the Diet on March 10.  Sakamoto unilaterally set these dates only with the approval of the leading parties, dismissing requests from opposition parties for further reviews on the budget bill.
 
All parties had agreed to include in the agenda time for discussion of such important issues as Japan’s response to the war in Iran and price inflation for two days, but Sakamoto alone later decided to end the budget discussion on March 13, a decision that the leading parties endorsed. As a result, the committee spent only 59 hours reviewing the bill, the shortest period in the last twenty years. The Lower House budget committee usually spends about 80 hours on the annual budget bill.
 
Behind Sakamoto’s use of his prerogative to limit discussion in the committee was pressure from Takaichi. Before discussion of the bill began, the LDP had set a deadline of March 13 for the vote in the Lower House. Takaichi figured that the LDP’s supermajority would make this timing work.
 
Furthermore, she wanted to minimize her time in front of the committee. She tends to make inappropriate remarks in the Diet. Quite unnecessarily, she said in last fall’s Diet session that the “Taiwan contingency” might trigger Japan’s right to use force. In this year’s session, she said that imperial succession would be limited to male offspring in the male line, misquoting an experts’ report. Sakamoto limited the time for her remarks in the committee and let other ministers answer questions from opposition parties.
 
At the hearing, the Prime Minister did not look healthy. She wore a glove on her right hand reportedly to lessen arthritis and a blanket covered her lap. Takaichi also seemed unable to stand and had cancelled a meeting with Islamic delegation in the evening of March 12.  The prime minister’s official residence explained that she had a cold. It is usual that the staff conceal true information about prime minister’s health. There is no information, so far, of cancelling her upcoming March 19 visit to the U.S. for a summit meeting with President Donald Trump.
 
Upset about the chairman’s inordinately speedy scheduling of the budget process, the opposition parties submitted to the House a no-confidence resolution against Sakamoto. It was easily dismissed with a majority vote of the leading parties. The budget committee with its majority of LDP and JIP members approved the budget bill on March 13, as scheduled, and it passed the House with an overwhelming majority in the Lower House’s Plenary Sittings later in the day.
 
“We protest the speed of the discussion process. It marks an embarrassing history for future generations,” said the leader of Centrist Reform Alliance (CRA), Jun-ya Ogawa. The leader of Democratic Party for the People (DPP), Yuichiro Tamaki, criticized the budget bill as insufficient to help households. But they are in opposition and cannot control a vote in the Lower House.
 
The LDP and the JIP do not have a majority in the Upper House. For Takaichi to save face, the budget bill needs to pass the Upper House by the end of March. The bill will automatically be approved on April 12, even if the Upper House votes against it. The leading coalition needs only four additional votes to gain a majority vote in the Upper House.
 
Takaichi is lucky that the opposition parties are not sufficiently united to block the bill. They take different stances on the Takaichi administration. For example, the DPP has decided to join Takaichi’s National Council on Social Security, accepting Takaichi’s invitation, but the CRA still hesitates. Some opposition parties are concerned about public criticism for any delay in passing the annual budget bill, which includes economic stimulus measures. The struggle between the parties in the Upper House will intensify through the end of this month.