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an agreement that all budget-related bills will be
concurrently approved in the event that the main
budget proposal is enacted. As we pointed out in
Market Mover of 7 September (Japan: Deficit-
Financing Bill Problem), Article 60 of Japan’s
constitution gives precedence to decisions on the
budget by the lower house (but not budget-related
bills). So, in accordance with the spirit of this article,
Diet passage should be automatic for any budgetrelated
bills needed to implement the budget.
A summertime election not out of the question
As to why the LDP might prefer this kind of deal, well,
the party is confident that it can wrest power from the
government at the next election. However, as it will
still lack a majority in the upper house, the stalemate
of a divided Diet is likely to remain until next July, at
least, when half of the upper chamber must stand for
re-election. What this means is that playing the trump
card to force an already winnable general election
means gambling, too, on prevailing in the next upper
house election. If the LDP failed to secure an upperhouse
majority (a real possibility), it would be faced
with the same predicament as it is today, of not being
able to win passage of its budget-related bills. Worst
case, deficit-financing legislation would remain the
opposition’s trump card for bringing down the
government year after year (Japan’s “revolving-door
premiership”). Consequently, the LDP may deem it
more advantageous to forgo a snap election and
focus instead on a deal that forswears for good the
use of budget-related bills as a political football. That
would mean leaving the dissolution of the lower
house to the discretion of Prime Minister Noda, who,
because of his party’s dismal approval ratings, is
eager to delay the election as long as possible. This
would essentially mean hodling the upper and lower
house elections next summer (the lower house’s
term ends in August 2013). The LDP, meanwhile,
could use this time to prepare for both elections
under new leadership. As all of the candidates
running to replace LDP head Sadakazu Tanigaki are
aware of the risks of playing this trump card (it was
used against the LDP when it was in power, and the
LDP has used it to attack DPJ regimes), the
likelihood of the summertime election scenario is not
necessarily small.
Ryutaro Kono/ Makoto Watanabe 20 September 2012
Market Mover
17
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