The state auditor counted ¥3.25 trillion spent in the first two years and could not confirm the energy agency knew whether the discount hit its target. It runs on a public debt the IMF puts at 204.8 percent of GDP. Australia ran a smaller rebate, stopped it, and carries a quarter of the debt. Its factories are another story.
Japan's first discount was 7 yen off every low-voltage kilowatt-hour, about a fifth of the big utilities' regulated household price, from January 2023. Gas got 30 yen a cubic metre. The Board of Audit counts ¥3.25 trillion spent on the scheme in fiscal 2022 and 2023, and about ¥4.06 trillion budgeted by the round that ended in October 2024. It came back again. On 25 May 2026 Prime Minister Takaichi announced support for July to September, citing the Middle East situation: 3.5 to 4.5 yen off a household kilowatt-hour, 1.8 to 2.3 yen for high-voltage users.
The auditor's fiscal 2023 report is the cleanest paper on how it ran. Of the first year's ¥3.11 trillion, ¥2.53 trillion had to be carried into the next year, and ¥571 billion was carried again after that. The energy agency changed its performance targets each time it republished the program's review sheet. The only result it showed was provisional: a 14.8 percent bill cut against an 18 percent target. The Board said it could not confirm whether the agency knew the results or whether the target was met. It also could not confirm how the agency checked a secretariat that outsourced 71.2 percent of its costs, well above the 50 percent line that requires a stated reason. Label: evidenced audit findings on measurement and oversight. Not a finding of fraud.
Each round was a cabinet package or a prime minister's decision, paid from supplementary budgets or a reserve fund rather than the main budget. That matters because of the ledger it lands on. The Finance Ministry projects central and local long-term debt at ¥1,344 trillion by March 2027, 194 percent of GDP. The IMF's October 2026 tables put general government gross debt at 204.8 percent for 2025. Debt service takes ¥31.3 trillion, a quarter of the fiscal 2026 general account. Interest alone is ¥13.1 trillion, 10.7 percent. The ministry's own fact sheet says the assumption that interest rates stay below growth is uncertain. The Bank of Japan lifted its policy rate to around 1.25 percent in September.
Outside advice ran the other way. The OECD's 2024 survey said remaining energy support should be targeted and phased out. IMF staff in April 2026 called for eliminating poorly targeted subsidies, including energy subsidies. Japan kept renewing. Label: evidenced international advice, not followed. This is not a command chain.
The green side went into statute, with the bill sent forward. The GX Promotion Act, a cabinet bill, passed the lower house on 30 March 2023 with the Liberal Democrats, Komeito, Ishin and the Democratic Party for the People in favour, and the Constitutional Democrats, Communists, Reiwa and Yushi no Kai against. It lets the state issue transition bonds from fiscal 2023 to 2032, about ¥20 trillion of support over ten years on the ministry's account, and repay them by fiscal 2050 from a fossil fuel levy starting in fiscal 2028 and paid emission allowances for power generators from fiscal 2033. Label: evidenced domestic statute, centre-right bloc, cost pushed forward.
Industry did not hollow out. World Bank data put manufacturing at 18.8 percent of Japan's GDP in 2024, against 22.2 percent in 2000.
Australia, like for like. On the same IMF tables, Australian general government gross debt was 51.9 percent of GDP in 2025, a quarter of Japan's. Commonwealth interest payments are A$29.6 billion in 2026-27, 1.0 percent of GDP, against roughly 1.9 percent for Japan's central interest bill (¥13.1 trillion on a ¥691.9 trillion GDP outlook, Rico calculation). Australia also paid retailers to cut bills. The Energy Bill Relief Fund cost A$3.5 billion for a $300 household rebate in 2024-25 and A$1.8 billion for $75 a quarter until 31 December 2025. It was a flat credit, not a per-unit discount, and it ended. Treasury says the end adds about half a point to headline inflation across 2026. Those two budgets come to about 0.2 percent of a year's GDP, against roughly 0.65 percent budgeted in Japan by late 2024 (Rico calculation, rough scale). Australia does better on debt, on interest and on stopping. It does worse on the factory floor: manufacturing was 5.3 percent of GDP in 2025, down from 11.4 percent in 2000. Why is not tested here. Label: gap evidenced, cause hypothesis.
Japan carries the heaviest public debt in this log without a factory collapse, and its power discounts were domestic choices made against IMF and OECD advice. Shared pressures, separate hands.
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