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.

Kishida Administration Grilled by Opposition Parties

CCS Hayashi

And it is inconclusive

By Takuya Nishimura, Senior Fellow, Former Editorial Writer for The Hokkaido Shimbun
The views expressed by the author are his own and are not associated with The Hokkaido Shimbun
You can find his blog, J Update here.
February 10, 2024. Special to Asia Policy Point

In the Japanese Diet, the Budget Committees of both Houses are where the hottest political issues are discussed between lawmakers and government officials. Last week, starting on February 5, Prime Minister Fumio Kishida was grilled by members of the Lower House Budget Committee over his handling of political reform within the ruling Liberal Democratic Party (LDP) and his appointment of cabinet ministers connected to the controversial Unification Church. Kishida’s strategy is to give the opposition parties vague and inconclusive answers.

The Budget Committee hearings are the highlight of the Diet session every year and are ordinarily scheduled a week after the Q&A in the plenary session after the Prime Minister’s annual policy speech. While the Q&A in the plenary session is in the form of prepared questions and answers, a Budget Committee hearing is an unscripted debate within the time allocated to every party. The hearing is nominally about the budget bill submitted to the Diet, but the opposition parties ask about everything, because the budget bill deals with everything.

In the Budget Committee of the House of Representatives (Lower House), the opposition parties demanded to know the purpose of contributions by the LDP to its leaders. It was reported that former Secretary General Toshihiro Nikai had received ¥5 billion from that fund over five years. While LDP is continuing to investigate the failures to disclose cash distributions from each LDP faction to its members, the party’s own fund, which covers “policy activities expenses,” has been untouched by the slush fund scandal because this fund is not subject to disclosure requirements.

Kishida asserted a principle of “freedom of political activity” to defend the secrecy of the LDP’s expenses. “Freedom of political activity and people’s right to know should be balanced,” Kishida told the Secretary General for the Constitutional Democratic Party, Katsuya Okada. “Once the fund was disclosed,” Kishida argued, “it reveals business secrets of companies or organizations, and strategic plan of party will be leaked to the rivals in politics, or even to foreign countries.”

It is hard to understand why Kishida so strongly opposes disclosures about the LDP fund. The opposition parties are skeptical about the money, supposing that it must be used for things they cannot explain. It is not strange for people to imagine that the money must have ultimately been handed to local supporters, just as in the bribery cases of Katsuyuki Kawai in Hiroshima or Mito Kakizawa in Tokyo.

The opposition parties even referred to a possibility of tax evasion. Yuichi Goto (CDP) insisted that the leaders who received funds from the LDP may well have evaded income taxes, if they took unused funds and failed to report them on tax returns. A witness from Ministry of Finance testified that the receipt of surplus cash from the LDP may be a taxable event. Kishida reiterated that he would not explain the use of the fund.

Opposition party attacks on Kishida’s leadership have not been limited to reforms in response to the slush fund scandal and have spread to his appointments of ministers of his administration. Asahi Shimbun reported that the Minister of Education, Culture, Sports, Science and Technology, Masahito Moriyama, had received the support of the Federation for World Peace (FWP), an organization connected to Family Federation for World Peace and Unification (FFWPU, better known as the Unification Church), in the 2021 election. In October 2023, Moriyama’s ministry sought a court order to disband the FFWPU.

According to a series of reports by the Asahi, Moriyama accepted support from FWP for his election campaign, including a telephone bank staffed by FWP members, urging voters to vote. The newspaper also reported that Moriyama had signed a policy accord with FWP before his appointment. The accord included an agreement to support legislation to amend the constitution to enhance security as well as legislation to teach family values and to give children a moral education. He was also asked to caution voters against promoting LGBTQ rights and same sex marriage.

Moriyama’s ministry oversees religious corporations. Once entering into a policy accord with the FWP, Moriyama became responsible for implementing these policies even after he became minister. Obviously, the ministry’s neutrality on these policies was compromised.

In the hearing before the Lower House Budget Committee, Moriyama vaguely recalled that he had received some support from FWP. The next day, however, he refused to provide clear answers about the nature of his relationship with the FWP, repeating “I have no memory of it.” Kishida rejecting a request to replace Moriyama, said that Moriyama had terminated his relationship with FWP.

When the fact of a meeting with a person connected to FFWPU in 2019 was revealed last December Kishida said that he did not know who was in the meeting. The memory of Kishida also has a certain ambiguity.

Questions surrounding that meeting involve not only Moriyama but also another minister closer to Kishida. Chief Cabinet Secretary, Yoshimasa Hayashi, admitted to having a meeting with FWP officials before the 2021 election. In his daily press conference, Hayashi said that he was not sure about who was there in the 2019 meeting and what they talked about. The Harvard grad also has memory issues.

Watching Kishida’s mounting troubles, some LDP leaders have begun to act. Former Minister of Defense and former LDP Secretary General, Shigeru Ishiba, held a meeting with his colleagues, which he maintains as policy study group. The minister in charge of Economic Security, Sanae Takaichi, gave a lecture to a conservative group.

The activities of these quasi-factions in the LDP began only one week after the largest group, the Abe faction, and some other factions announced their dissolution. These are inconvenient facts for Kishida who will base his leadership on ending factions and promoting political reform in the LDP when he seeks reelection as LDP president this fall. More questions will be coming from the Upper House Budget Committee in its hearing with the Prime Minister in March.