TOKYO (Reuters) – Japanese Prime Minister Shigeru Ishiba’s party and a coalition partner are considering cutting the draft budget for the fiscal year from April by some 340 billion yen ($2.27 billion) to just under 115.2 trillion yen, Kyodo news agency said on Thursday.
The coalition on Tuesday agreed with the opposition Japan Innovation Party (JIP) to revise the annual budget bill, a rare move to ensure it passes before the start of the new fiscal year.
Such a revision would be the first time since 1996 that the government has been forced to change its initial budget allocation.
The revised budget will include higher household subsidies to ensure free school education demanded by the JIP, as well as a higher threshold for tax-free income that would result in a drop in tax revenue worth more than 620 billion yen, Kyodo said.
Higher spending and reduced tax revenue will be filled by a reserve fund that is supposed to be used for emergencies and other funds not fully utilised, according to the report.
The JIP’s support clears the way for parliament’s lower house to pass the budget before the new fiscal year starts in April.
($1 = 149.8300 yen)
(Reporting by Kiyoshi Takenaka and Makiko Yamazaki; editing by Mark Heinrich; Editing by Christina Fincher)
