Japanese Prime Minister Sanae Takaichi announced that the government will consider drafting a stopgap spending measure if the fiscal 2026 regular budget bill fails to pass parliament before the start of the new fiscal year on April 1 [1]. The regular draft budget, valued at 122.31 trillion yen ($773 billion), was approved by the House of Representatives on March 13 with the ruling parties' overwhelming majority, but the coalition remains a minority in the House of Councillors, making timely passage uncertain due to last month's snap general election and a tight deliberation schedule [1].
A provisional budget, if compiled, would be the first since 2015 and is intended to cover minimum necessary expenses for a limited period from the start of the fiscal year. Takaichi stated at a party executive meeting, "We want to consider compiling a provisional budget draft to prepare for unforeseen circumstances" [1]. One possible schedule is to endorse the stopgap budget draft at a cabinet meeting on Friday [1]. Under the Constitution, the regular budget will be enacted automatically if the upper house fails to vote on it by April 11, as the lower house vote takes precedence. This would require a stopgap measure for 11 days to avoid disruption in essential services, including expanded free high school tuition, social security spending, and tax allocation to local governments [1].
Chief Cabinet Secretary Minoru Kihara noted that past provisional budgets have included spending on new measures in addition to essential costs, but indicated opposition to earmarking expenses for soaring energy prices following the U.S.-Israeli war on Iran that began in late February, which were not included in the regular budget bill [1]. Meanwhile, the government has decided to use about 800 billion yen in reserves from the current fiscal year's budget to finance subsidies aimed at curbing the rise in gasoline prices. Gasoline subsidies to petroleum suppliers resumed last Thursday, but there are concerns the fund could dry up as the Middle East situation continues to deteriorate and keep crude oil prices elevated, posing risks to Japan's resource-poor economy [1].
Takaichi's recognition of the need for a stopgap budget comes amid demands from upper house opposition parties, including the Constitutional Democratic Party of Japan, for sufficient time for budget debate and a provisional measure to be drafted, threatening further delays [1].
CONCLUSION
The Japanese government is preparing for the possibility of a provisional budget to ensure essential services continue amid parliamentary delays and elevated energy prices. While the regular budget may be enacted automatically if the upper house does not vote by April 11, the need for a stopgap measure highlights ongoing political and economic uncertainties. Market sentiment remains cautious as concerns persist over the impact of high crude oil prices and potential disruptions to government spending.