Press Conference by Prime Minister Takaichi regarding the Cabinet Approving the Fiscal Year 2026 Draft Budget
December 26, 2025
[Provisional translation]
(Reporter)
I am Kawahara from Nikkei. Good to see you. Today, the Cabinet officially approved the initial budget bill for FY2026. The budget amounts to 122 trillion yen, marking the largest scale ever, while social security–related expenditures have also reached a record high. Would you please share your thoughts on this, and tell us how you plan to handle the upcoming Diet session to ensure its passage?
I am Kawahara from Nikkei. Good to see you. Today, the Cabinet officially approved the initial budget bill for FY2026. The budget amounts to 122 trillion yen, marking the largest scale ever, while social security–related expenditures have also reached a record high. Would you please share your thoughts on this, and tell us how you plan to handle the upcoming Diet session to ensure its passage?
(Prime Minister Takaichi)
Today, my Cabinet approved the FY2026 initial budget bill, designed to seamlessly strengthen and enrich the Japanese archipelago, following the measures taken in the FY2025 supplementary budget. In other words, we need a “strong economy” to create a Japan where people in all 47 prefectures can live safely, access necessary medical and welfare services, receive high-quality education, and find employment. While advancing multi-year initiatives, we have increased funding for key policies right from the stage of the initial budget. Specifically, we have appropriately reflected economic and price trends in the entire budget, including through revisions to medical and nursing care fees. For vital policies that we have continuously addressed through multi-year funding plans—such as those for strengthening defense capabilities—we have continued to increase the budget accordingly. Furthermore, by securing new revenue sources, we have increased funding for various areas, including initiatives aimed at making education effectively free. As a result of all these initiatives, the total amount for the general account budget has reached 122.3 trillion yen.
Today, my Cabinet approved the FY2026 initial budget bill, designed to seamlessly strengthen and enrich the Japanese archipelago, following the measures taken in the FY2025 supplementary budget. In other words, we need a “strong economy” to create a Japan where people in all 47 prefectures can live safely, access necessary medical and welfare services, receive high-quality education, and find employment. While advancing multi-year initiatives, we have increased funding for key policies right from the stage of the initial budget. Specifically, we have appropriately reflected economic and price trends in the entire budget, including through revisions to medical and nursing care fees. For vital policies that we have continuously addressed through multi-year funding plans—such as those for strengthening defense capabilities—we have continued to increase the budget accordingly. Furthermore, by securing new revenue sources, we have increased funding for various areas, including initiatives aimed at making education effectively free. As a result of all these initiatives, the total amount for the general account budget has reached 122.3 trillion yen.
On the other hand, tax revenue is estimated at 83.7 trillion yen as we expect an improved economic climate combined with institutional factors such as the increase in the basic deduction, among other things. Consequently, the amount of newly issued government bonds is expected to be 29.6 trillion yen, marking the second consecutive year that the value of such bonds under an initial budget remains below the 30 trillion-yen threshold. The bond dependency ratio is also expected to decrease to 24.2%, falling further from 24.9% recorded at the time of the FY2025 initial budget, which already dropped below the 30% mark for the first time in 27 years. Additionally, we estimate the primary balance of the national government’s general account initial budget will turn positive for the first time in 28 years since the FY1998 budget.
In this way, I believe we have produced a budget proposal meant to strike a balance between a “strong economy” and fiscal sustainability, while remaining mindful of fiscal discipline. In the Diet session to start early next year, I will explain the details of the budget with the utmost sincerity to gain broad support and strive for the swift passage of the budget and related bills, including the tax reform bills and the bill on special provisions concerning issuance of government bonds.
Thank you for everything this year. I wish you a very Happy New Year.
