Economic, Diplomatic Efforts May Stall After Coalition Loss; Opposition’s Cooperation Will Be Vital To Pass Budget, Bills

The Yomiuri Shimbun
Prime Minister Shigeru Ishiba, center, Liberal Democratic Party Secretary General Hiroshi Moriyama, center left, and LDP Election Strategy Committee Chairperson Shinjiro Koizumi, second from left, are seen at LDP headquarters in Tokyo on Monday.

With the Liberal Democratic Party and Komeito falling short of a combined majority in the lower house election, the government’s response to numerous domestic and international issues may stall.

For the time being, the focus will be on compiling a supplementary budget for fiscal 2024. Even if Prime Minister Shigeru Ishiba continues to run the government, opposition parties’ cooperation will be indispensable to pass the budget and bills in the Diet.

Ishiba wants to increase the size of the budget over last fiscal year’s ¥13 trillion, and the ruling and opposition parties could end up in a tug-of-war over this issue.

Toward the end of the year, difficulties await in the debate over next fiscal year’s budget and tax system reform.

Another focal point is political reform in response to the hidden funds issue involving the LDP. Opposition parties, including the Constitutional Democratic Party of Japan, the Japan Innovation Party and the Democratic Party for the People, have called for the abolition of the funds for political activities that parties give to individual Diet members during their election campaigns.

The LDP’s pledge regarding the political activity funds was limited to the phrase “with an eye to abolish it in the future.” Ishiba is said to have told people around him that he would be fine with eliminating the practice, and his decisiveness is likely to be tested on this matter.

On the diplomatic front, a new U.S. administration will take office following the presidential election on Nov. 5, and building ties will be an urgent task for the Japanese government. In an interview with The Yomiuri Shimbun this month, Ishiba indicated that he would consider visiting the United States before the inauguration of the president in January to hold the first meeting with the president-elect.

An Asia-Pacific Economic Cooperation summit and a G20 summit are scheduled for mid-November. The focus will be on whether a meeting with Chinese President Xi Jinping will be realized to resolve pending issues with Beijing, such as the lifting of import restrictions on Japanese marine products.