Policy Implementation in Doubt Following Coalition Breakup; LDP Will Require Cooperation From Many Opposition Parties

By Kojiro Tanikawa and Yujiro Okabe / Yomiuri Shimbun Staff Writer

16:35 JST, October 13, 2025

Komeito’s departure from the ruling coalition has made the implementation of various policies uncertain.

Even if Liberal Democratic Party President Sanae Takaichi manages to form a new cabinet, securing majority support in the Diet for budgets and bills will require cooperation from many opposition parties. Policies opposed by the LDP now have a higher chance of being realized if Komeito and other opposition parties join forces.

Measures against high prices

“In any event, I’m determined to first start intraparty discussions on measures against high prices and other critical issues,” Takaichi posted Sunday on X, expressing her determination to formulate economic measures.

Since the LDP presidential election campaign, Takaichi has demonstrated her willingness to tackle urgent issues such as abolishing the provisional gasoline tax rate and raising the income tax exemption threshold — measures that are also being called for by opposition parties.

If elected prime minister at the extraordinary Diet session expected to convene on Oct. 20 or later, Takaichi plans to immediately give instructions for the compilation of a supplementary budget for fiscal 2025 to fund these measures.

However, securing opposition cooperation to pass the supplementary budget will present an even tougher challenge than before. Komeito’s withdrawal from the coalition means the ruling camp has lost 24 seats in the House of Representatives and 21 seats in the House of Councillors, pushing a majority in both chambers even further out of reach. Finding partners for each policy among the opposition parties, including Komeito, will require additional time and effort.

Delay until next year?

Abolishing the provisional gasoline tax rate is seen as the first hurdle, although the ruling and opposition blocs had agreed to take this step within the year. No alternative fiscal source has been found and a specific date for the rate’s abolition remains undecided.

Opposition parties are intensifying their criticism against the stalled discussions over the abolishment, due partly to the LDP presidential election.

Takaichi has said she strongly supports raising the income tax threshold, in an apparent attempt to please the Democratic Party for the People. However, she has yet to fully read the next move of the DPFP, as it opposed fiscal 2025 budget demanding the raise of the threshold to ¥1.78 million.

“Keeping promises fosters trust,” DPFP leader Yuichiro Tamaki warned the LDP while speaking to reporters in Nanao, Ishikawa Prefecture, on Sunday.

The next extraordinary Diet session has been delayed, so it is becoming increasingly difficult to pass the supplementary budget within the year. Some in the LDP are taking the cautious stance that passing the supplementary budget at the start of next year’s ordinary Diet session is also an option.

Discussions continue

The outlook for the ordinary Diet session starting next January is increasingly uncertain, as the ruling and opposition parties’ positions on various policies are complexly intertwined. Even if agreement is reached on individual policies, it remains unclear whether they will support the entire budget proposal for next fiscal year.

The LDP is continuing discussions with Komeito and the Constitutional Democratic Party of Japan on the introduction of a “tax credit with cash payments” system that would combining direct cash payments and income tax cuts. The LDP is also talking with Komeito and the Japan Innovation Party on free high school tuition.

Funding issues persist in both areas.

CDPJ leader Yoshihiko Noda mentioned the necessity of a consumption tax cut on a Saturday TV program. “It is important to find common ground among opposition parties,” Noda said, indicating his intention to call for discussions with Komeito as well.

For the opposition, this presents a golden opportunity to push policies that the public likes onto the ruling LDP. However, the LDP is increasingly concerned that if it keeps accepting opposition demands, there will be funding issues.

“No matter how much money the government secures, there will never be enough,” said a senior member of the party’s Research Commission on the Tax System.

Komeito removed lowering the consumption tax from its list of key issues to promote so as to align with the LDP during the upper house election in July. Within the LDP, however, some have expressed caution over what this could do to the party’s reputation.

“The LDP could be seen as the lone villain,” a former cabinet minister said.