Chamber of Councillors PASSED The Takaichi government’s JPY 3.11 trillion budget on Friday, June 5, as expected, with the Democratic People’s Party (DPFP), Team Mirai and the Conservative Party of Japan (CPJ) joining the Liberal Democratic Party (LDP) and Ishin no Kai to approve it.
Not only was the budget passed with extraordinary haste – the cabinet approved it on June 3 and each house debated it for just one day – but it was also quickly put together after Prime Minister Sanae Takaichi admitted in mid-May that a supplementary budget would be needed.
While the supplementary budget will give the government a bigger cushion for continuing fuel subsidies, the passage of the budget will do little to ease political pressure on Takaichi to show how she intends to exit the costly subsidies – not least since the passage of the supplementary budget. means that the Japanese government has moved from a projected surplus of 1 trillion JPY to a projected deficit of 1.7 trillion JPY in FY2026.
The government is weighing the support package for tax cuts
Among the questions now facing the Takaichi government as it prepares to impose a consumption tax on food products is whether and how to deliver SUPPORTING for businesses as they prepare to implement the tax cut.
The government could face extensive demands for help that go beyond supporting businesses that modify their tills to collect tax at a lower rate.
For example, restaurants, which are already disadvantaged by the discounted consumption tax rate of 8%, fear they will face a greater disadvantage when the gap is between a 10% dine-in fee and 1% on grocery or convenience store purchases. Meanwhile, food manufacturers, who may also operate small retail operations that are exempt from paying the consumption taxes they collect and who complain that their gross receipts will fall but their costs will remain the same, may also seek relief from the government.
As such, even though Finance Minister Satsuki Katayama said On Friday that the government will not rely on deficit bonds to finance the tax cuts, it would be premature to take that claim at face value. The Takaichi government, after all, will have to account not only for the 4.4 trillion JPY or so it may lose by lowering the consumption tax on food products to 1%, but also for the various measures it introduces to offset business interests as well as a possible rebate for households to make the tax cut equivalent to reducing it to zero.
The problem of defamatory videos is not going away
In Diet deliberations on Friday, Takaichi continued to face questions over her staff’s involvement in the creation and distribution of defamatory videos targeting her LDP leadership rivals last year.
A day after she said she lacked a subscription and therefore couldn’t listen to a recording purportedly between one of her secretaries and a man who says he makes videos – she said that she heard it on Thursday evening and could not tell if it was her secretary’s voice.
She said there was no note in her office of the meeting and was offended that a weekly tabloid article was being given more credence than her denials of any connection to these activities. She claimed that there was something strange about the recording, implying that it was fake or doctored. When a lawmaker from the Constitutional Democratic Party (CDP) suggested that she file a complaint with the publication, she replied that she was too busy with state affairs and could not spare the time.
Despite Takaichi’s outrage, this story doesn’t seem to be going away. Asahi endnoteSfor example, that her answers to questions have varied in detail, from the Prime Minister and her secretary having “no acquaintance” with the man who allegedly made the videos to the man’s “non-meeting”.
On Friday, Center Reform Alliance (CRA) leader Junya Ogawa said that if the prime minister does not give clear answers, her secretary should be questioned in the Diet. Her response to questions has too drawn some criticism from within the LDP, albeit anonymously for now.
Asahi there is a timeline for the accusations and the Prime Minister’s response here.
Further reading
For the second time this week, Prime Minister Takaichi used her participation in parliamentary discussions REMARK over the value of the yen. At the upper house’s budget committee on Friday, the prime minister reiterated her oft-stated view that the yen’s weakness “has merits and demerits” and argued that strengthening Japan’s international competitiveness will “ensure confidence in the yen.” She also emphasized that her focus is on promoting investment and potential growth.
The Mainichi Shimbun, analyzing its latest opinion poll, endnoteS that Takaichi’s approval among independents (35%) fell below their disapproval (37%) for the first time, with dissatisfaction with the government’s handling of inflation a likely cause of the shift. Inflation may also be a factor in declining government support INTER young people; Mainichi found that Takaichi’s approval among voters under 30 fell below 50% for the first time.
Takaichi RECEIVED LDP upper house officials in Kantei (official residence) again on Friday evening to express its gratitude for their help in moving the supplementary budget through the Diet.
The Japanese government has began Discussions with the Indonesian government regarding the sale of retired Asagiri-class destroyers.
Ministry of Economy, Trade and Industry DESIGNATED an additional JPY 150 billion investment in chipmaker Rapidus, bringing the government’s total investment to at least JPY 2.6 trillion.
Lawmakers of the PLD they continue to express their anger at Ishin no Kai’s intention to smuggle his plan of the Osaka metropolis into the debate over an auxiliary capital.
Real wages pink for the fourth straight month in April – rising 1.9% thanks in part to government petrol subsidies and other measures that have curbed price rises for now – but consumer spending fell 0.5% year-over-year, the fifth consecutive decline.
The speakers and vice-presidents of the two houses of the Diet DESIGNATED on June 5 that they had completed a compromise plan for securing the imperial line to be presented to a general meeting of legislators on June 8.
Sanseito leader Sohei Kamiya, whose party voted against the supplementary budget, reported his growing displeasure with Takaichi, stating that although he once thought their policies were “40% overlapping”, they are now “only 20% overlapping”.
The opposition legislators are unhappy with CRA leader Ogawa over his inability to effectively question Takaichi, and there is growing frustration between the CRA and its upper house partners, the CDP and Komeito, over how to challenge the Takaichi government. The three parties generally have failed to coordinate their positions on the main legislation.
Can Japan’s “semi-parliamentary” system features the rise of a populist strongman?
it ITEM reprinted with permission from Tobias Harris’s newsletter, Observing Japan.
