Heated Debate Over COVID-19 Recovery Funds: "Budget Reallocation Needed" vs. "Bond Issuance Required"

[Image source=Yonhap News]

[Asia Economy Reporter Lee Ji-eun] Representatives of each proportional representation party engaged in a heated debate over the funding to overcome the novel coronavirus disease (COVID-19). While the Future Korea Party argued for reallocating the existing budget, the Justice Party raised their voices to issue government bonds, stating that the current national debt ratio of 40% is at a sound level.

At the 21st proportional representation National Assembly candidate debate held at the MBC Broadcasting Center on the 6th, Kim Jong-seok, a candidate from the Future Korea Party, said, "Everyone is saying to create a supplementary budget plan and have it reviewed by the National Assembly, but to complete and execute the supplementary budget plan would be after June," adding, "The president should quickly invoke the emergency financial order and provide 500,000 won to all citizens to overcome the crisis." He emphasized securing 100 trillion won by changing the use of the existing budget, which amounts to 512 trillion won.

In response, Kim Jong-chul, a candidate from the Justice Party, said, "The United States, whose national debt ratio is three times higher than ours, decided to provide 1,200 dollars, and Germany, with a debt ratio 1.5 times ours, prepared policies worth 1,340 trillion won," adding, "In a crisis situation, if the government does not borrow, households will incur debt, so the Moon Jae-in administration must boldly proceed," pointing out the necessity of bond issuance.

Kim Jong-chul continued, addressing the Future Korea Party, "You say you can secure about 100 trillion won by changing budget items out of 512 trillion won, but 260 trillion won of the 512 trillion won is mandatory spending," and questioned, "Where will the 100 trillion won come from?" criticizing the irrationality of changing budget purposes. In response, Kim Jong-seok of the Future Korea Party said, "There was a lot of padding in last year's budget, such as government office building renovations and travel expenses, which were rushed through," adding, "Let's discuss this in April first."

Jung Pil-mo, a candidate from the Democratic Citizens' Party, also targeted the Future Korea Party's claims, saying, "There are many rigid costs, so adjustments are more difficult than expected. These are all budgets that affect our economic vitality," and proposed, "I will suggest expanding the government's plan to provide 1 million won in disaster income only to the bottom 70% income bracket to all households. I ask the opposition parties to cooperate with the second supplementary budget."

The Future Korea Party also criticized the government's income-led growth policy for causing the economic crisis. Kim Jong-seok said, "Our economy had underlying conditions due to the flawed income-led growth," and pointed out, "The virus outbreak inflicted fatal damage while we were heading into a crisis phase due to these underlying conditions."

In response, Jung Pil-mo said, "The Future Korea Party is really casting a cursed criticism on income-led growth," and countered, "Since the foreign exchange crisis, the income share of corporations has increased while that of households has decreased. Increasing household income to boost domestic demand and production is necessary to create a virtuous economic cycle."

Joo Jin-hyung, a candidate from the Open Democratic Party, said, "Income-led growth has not performed as expected, and the decline in growth rate cannot be denied," but added, "The overseas economy contracted, and structurally, the entire domestic economy needs long-term transformation. The failure to achieve this transformation has caused a long-term downward trend, not the policies of a specific administration."

Kim Jong-chul of the Justice Party also said, "We think income-led growth is good," and pointed out, "It was very weak in expanding union rights so that wage workers could negotiate and increase their income themselves."

There was also criticism that the Future Korea Party is engaging in "criticism for the sake of criticism." Joo Jin-hyung said, "Hwang Kyo-ahn, leader of the United Future Party, said the supplementary budget is 'not a handout budget,' and when the emergency disaster relief fund was announced, he criticized it as 'plotting election fraud by throwing taxpayers' money around,' but three days later, he said, 'Let's immediately provide 500,000 won,'" adding, "The Future Korea Party's claims are not serious and are only made to oppose."

This content was produced with the assistance of AI translation services.