FY2025 budget to ensure free high school education, advance social security reforms

The agreement marks the culmination of efforts by Prime Minister Shigeru Ishiba’s Liberal Democratic Party and Komeito party to win over the Japan Innovation Party, which has hinted at supporting the government’s budget plan if its requests are met.

Seeking to bolster its support base beyond the Kansai region centered on Osaka, the JIP has called for increasing subsidies to make high school education free, regardless of household income and trim medical expenses by 4 trillion yen a year.

Ishiba, Komeito chief Tetsuo Saito and JIP leader Hirofumi Yoshimura formalized the tripartite agreement during a meeting at the Diet.

“It’s significant that the ruling and opposition parties reached an agreement after constructive discussions, demonstrating how parliament should work,” Ishiba said.

Yoshimura, who is the governor of Osaka, said the agreement allows his party to fulfill its campaign promise of providing free education. “We will continue to follow through on the promises we’ve made to our supporters,” he said.

As the ruling coalition no longer controls the powerful House of Representatives after losing its majority in the general election in late October 2024, the LDP and Komeito need support from opposition parties to pass budgets and bills.

Ishiba, who took office just weeks before the lower house election, has emphasized the importance of thorough parliamentary debates and listening to the views of the opposition camp.

Under the agreement reached by the three parties, the government will provide 118,800 yen per year to households with a high school student, irrespective of school type or income level, in fiscal 2025.

Starting in fiscal 2026, households with a child attending a private high school will receive up to 457,000 yen per year, rising from the current 396,000 yen, bringing it in line with the average private high school tuition.

The three parties aim to reduce annual medical expenses, with a target of 4 trillion yen as requested by the JIP. They also plan to make sure that the next fiscal year’s budget reflects their agreement, allowing it to be implemented promptly before the end of March.

The development comes ahead of the March 2 deadline for a draft budget plan to take effect automatically before the next fiscal year begins on April 1. Citing a tight Diet schedule, an LDP executive had said it would be difficult to have it approved by the lower house in time.

Under the Constitution, a budget is enacted 30 days after being approved by the lower house and sent to the House of Councillors, or upper house.

Even if the budget plan is revised and clears the lower house after Sunday, it can still be put into effect before the next fiscal year begins, depending on the progress of deliberations in the upper house.

The government’s budget plan submitted to parliament is already the largest on record, at 115.54 trillion yen. It aims to boost defense spending and cover ballooning social security costs due to the rapid aging of society.

Separately, the ruling bloc has been in talks with another opposition force, the Democratic Party for the People, on how much the 1.03 million yen income tax threshold should be raised to help households hit by inflation. But they are struggling to reach a consensus.

© KYODO