Ruling Party and Government Plan Expanded Budget for Next Year... '20 Trillion Won' Reflected in Korean New Deal

[Image source=Yonhap News]

[Asia Economy Reporter Kang Nahum] The Democratic Party of Korea and the government have decided to significantly increase next year's budget to respond to the economic crisis caused by the novel coronavirus infection (COVID-19). In particular, they plan to allocate a budget of more than 20 trillion won to promote the Korean New Deal.

Kim Tae-nyeon, floor leader of the Democratic Party of Korea, stated at the '2021 Budget Draft Formation Party-Government Consultation' held at the National Assembly Members' Office Building on the 26th, "The key to economic recovery lies in fiscal policy. Sufficient fiscal investment is necessary," adding, "Fiscal policy must play a role in quickly revitalizing our economy and furthermore serve as a future transition primer that turns crisis into opportunity."

He continued, "While the global economy is experiencing an unprecedented situation of negative growth, major countries are adopting new economic policies different from before to recover their economies," emphasizing, "When walking a path no one has taken before, bold shifts in thinking and creative solutions are required."

He presented five major directions for next year's budget formulation: ▲ sufficient budget allocation for COVID-19 prevention ▲ budget for future transition after COVID-19 (Korean New Deal) ▲ contribution to national balanced development ▲ strengthening employment safety nets ▲ and expansion of youth budgets.

Jo Jung-sik, chairman of the Policy Committee, also said, "Domestic and international economic conditions are expected to be challenging. To protect the lives and stability of the people and to ensure rapid economic and livelihood recovery, expansionary fiscal policy is absolutely necessary next year as well," suggesting expansionary fiscal policy by stating, "Our fiscal soundness is better than that of major countries such as the United States and Japan, so we can use fiscal resources extensively."

Jo added, "The party and government will decide the final budget size considering the budget increases over the past 2-3 years," and "In addition, the budget formulation process will proceed to realize three core goals: leading the great economic and social transition, supporting rapid recovery of the livelihood economy, and protecting the lives and safety of the people."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said, "Next year's budget draft focuses on overcoming the economic crisis, supporting the full-scale promotion of the Korean New Deal, and making government achievements visible and tangible."

Deputy Prime Minister Hong explained, "First, to lead economic recovery, we aimed to include comprehensive economic budgets covering private consumption and investment, public investment, exports, and regional economies," adding, "To promote the Korean New Deal, which is the framework for becoming a leading country, we have surely reflected more than 20 trillion won as promised to the people."

He continued, "While the budgets of the past 3-4 years supported the promotion of government tasks, next year's budget focuses on accelerating the pace of government task implementation and enabling the public to feel the results," citing examples such as "full implementation of free high school education, phased abolition of the support obligation criteria for livelihood benefit recipients, payment of 300,000 won pension to all basic pension recipients, and the implementation of the National Employment Support System in January next year, which represent strengthening of livelihood and employment social safety nets."

Deputy Prime Minister Hong said, "After party-government consultations, the budget draft will be submitted to the National Assembly on September 3 following the Cabinet meeting next week," adding, "Along with the budget draft, the tax reform plan for this year, which was previously discussed in party-government consultations, and the five-year national fiscal management plan containing the fiscal operation plan for the next five years will also be submitted."

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