Financial Insights That Matter
(Bloomberg) — Japanese Prime Minister Shigeru Ishiba’s government risks rejection of its annual budget if it doesn’t concede more ground to a small opposition party seeking a larger tax-free allowance, according to the party’s policy chief.
Most Read from Bloomberg
The Democratic Party for the People will continue to push for a ceiling on tax-free income to be lifted to ¥1.78 million ($11,500) and will not accept the ruling coalition’s current proposal, DPP policy chief Makoto Hamaguchi said. He also largely ruled out a possible ramped-up government offer cited in a local media report.
“I don’t think we can agree to that,” Hamaguchi said in an interview when asked whether the DPP will give the ruling bloc the additional votes it needs to pass the budget if the tax-free ceiling is bumped up to ¥1.5 million without a commitment to keep raising the allowance or an agreement to scrap a gasoline tax.
Ishiba needs to secure passage of the annual budget to demonstrate he can run policy effectively with his minority coalition and shore up his leadership of the ruling party ahead of a summer election. The DPP has enough members in the lower house of parliament to ensure Ishiba’s coalition can push the budget through.
Budget difficulties have spelled trouble for minority governments around the world in recent months, contributing to the falls of Canadian Prime Minister Justin Trudeau and French Premier Michel Barnier and the impeachment of South Korean President Yoon Suk Yeol after he declared a short-lived martial law.
While Ishiba’s coalition secured support from the DPP over an earlier spending package, ongoing talks stalled in December. The prime minister’s Liberal Democratic Party and its Komeito partner decided to lift the tax-free ceiling to ¥1.23 million from ¥1.03 million in December without a nod from the DPP. The opposition party has continued to argue that the ceiling must keep going up.
“It’s not about settling it at a particular level,” Hamaguchi said. “We need to continue striving to raise the ceiling to ¥1.78 million.”
Raising the ceiling to ¥1.23 million would cut annual tax receipts by up to ¥700 billion, a far lower figure than the ¥8 trillion or so of lost revenue if the allowance is raised to the DPP’s target, according to the government.
#1a73e8;">Boost Your Financial Knowledge and Achieve Stability
Discover a growing online community dedicated to delivering financial news, tips, and strategies designed to help you manage money effectively, save smarter, and grow your investments with confidence.
#1a73e8;">Top Financial Tips for Saving and Investing
- Personal Finance Management: Master the art of budgeting, expense tracking, and building a strong financial foundation.
- Investment Opportunities: Stay updated on market trends, learn about stocks, and explore secure ways to grow your wealth.
- Expert Money-Saving Advice: Access proven techniques to reduce expenses and maximize your financial potential.