Public Finance

In this chapter, I will discuss public finance and particularly the general account budget of the country. First, I will examine the positioning of budgets in Japan by way of comparing it with other laws. Budgets have points in common with and points of difference from laws. The former includes the fact that neither a budget nor a law can be enacted unless the Diet, as the highest organ of state power, adopts a resolution (Article 86 of the Constitution). On the other hand, there are several points of difference between budgets and laws. First, a draft budget must first be submitted to the House of Representatives (Article 60 of the Constitution). This is known as the House of Representatives’ priority in budgetary discussions. In draft budget deliberations, once the House of Representatives adopts a resolution, the budget will be automatically enacted thirty days later even if the House of Councilors has not yet completed its deliberations. Second, it is required that the budget for the following FY be enacted by the end of the current FY and implemented from the beginning of the new FY. If a budget is not enacted before the start of the new FY, a stopgap budget will be submitted to prevent government activities from shutting down. However, since a stopgap budget can only cover minimally necessary administrative expenses, administrative delays will be caused, which means that a government should try to pass a main budget as much as possible. Third, the Cabinet alone, and not the Diet, has the right to propose a draft budget, unlike bills.