Ruling Party and Government to Invest 20 Trillion Won in Korean New Deal and Expand Rental Housing by 190,000 Units

On the 26th, Hong Nam-ki, Deputy Prime Minister for Economic Affairs, Kim Tae-nyeon, Floor Leader of the Democratic Party of Korea, and Cho Jung-sik, Chairman of the Policy Committee, along with other key attendees, posed at the 2021 budget formulation party-government consultation held at the National Assembly. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kang Nahum] The Democratic Party of Korea and the government have decided to continue an expansionary fiscal policy to overcome the economic crisis caused by the novel coronavirus disease (COVID-19) pandemic. Next year, the supply of public rental housing, focusing on youth and newlyweds, will be increased to 190,000 units, and free high school education will be fully implemented one year earlier, starting next year. The issuance scale of local love gift certificates will also be significantly expanded from 9 trillion won this year to 15 trillion won next year, and 20 trillion won will be allocated to the Korean New Deal.

On the morning of the 26th, after the party-government budget consultation meeting for next year, Cho Jung-sik, chairman of the Democratic Party Policy Committee, told reporters, "We agreed on the need to maintain an active fiscal expansion policy next year as well for rapid economic recovery and stabilization of people’s livelihoods."

The party and government decided to significantly increase the related budgets for ▲ full-scale promotion of the Korean New Deal project for a leading economic transition ▲ economic recovery and regional economic revitalization ▲ strengthening employment and social safety nets ▲ establishment of comprehensive youth measures ▲ protection of citizens’ lives and safety.

Local love gift certificates are a card aimed at revitalizing the depressed local economy and promoting consumption. This year, they were budgeted at 3 trillion won in the original budget and 6 trillion won in the supplementary budget, but next year, 15 trillion won will be allocated directly in the original budget. Support for vouchers and coupons in agriculture, fisheries, culture, and tourism sectors will also be strengthened.

In terms of strengthening the social safety net, the supply of public rental housing will be expanded to 190,000 units, and free high school education will be fully implemented next year. The Youth Hope Package support project will receive an investment of 20 trillion won. They will increase the supply of youth rental housing and support the "employment first, then further education" policy by providing incentives for vocational high school graduates and expanding tuition support for employed high school graduates attending university.

The budget to be invested in the Korean New Deal project will be expanded beyond the initial plan to more than 20 trillion won. It will be invested in ten representative projects including the Data Dam, intelligent government, green smart schools, digitalization of national safety SOC, future cars, and green energy. Additionally, to establish a stable financial base for the success of the New Deal, a citizen-participatory Korean New Deal fund will be created.

The original budget for next year is expected to be in the mid-550 trillion won range, an increase of 8 to 9% compared to this year’s original budget. Chairman Cho said, "The party and government will decide the final budget size considering the budget increases over the past 2 to 3 years," adding, "Furthermore, the budget formulation process will proceed to realize three core goals: leading the great economic and social transition, supporting the rapid recovery of the people’s economy, and protecting citizens’ lives and safety."

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