People Power Party Think Tank Proposes "Introduction of Fiscal Rule Supervisory Body" to Emergency Committee

[Image source=Yonhap News]

[Asia Economy Reporter Kim Hyemin] On the 15th, Yeouido Research Institute, the think tank of the People Power Party, proposed the introduction of a National Fiscal Supervisory Agency to monitor and supervise the fiscal rules of the government and local governments. It is known that this proposal was also reported to the party's Emergency Response Committee on the same day.

Yeouido Research Institute argued the necessity of introducing the Fiscal Supervisory Agency in a report titled "Issue Brief: Proposal for Fiscal Rules Focused on Effectiveness and the Introduction of a Fiscal Supervisory Agency." Strategic Planning Committee member Je Bang-hoon pointed out in the report that "the fiscal rules announced by the Ministry of Economy and Finance, which are 'a national debt ratio of 60% against Gross Domestic Product (GDP) and a consolidated fiscal balance ratio of -3%,' are looser than those presented by the government four years ago."

Committee member Je stated, "The fiscal rules have completely lost their binding force due to being riddled with exceptions," and added, "After the government projected last month that the national debt ratio would rise to 81% against GDP and that the National Pension Fund would turn to deficit, it announced fiscal rules a month later, but the main public opinion is that these are 'political rules' aligned with the current administration's expansionary fiscal policy."

In response, the report proposed, "An independent organization to monitor and supervise the establishment and implementation of fiscal rules should be introduced," and suggested, "The establishment of a National Fiscal Supervisory Agency under the National Assembly should be considered." The agency would have seven deputy minister-level supervisory committee members, including a vice-premier-level president, appointed by the National Assembly, and the Ministers of Economy and Finance and the Ministry of the Interior and Safety would evaluate the fiscal soundness plans of their respective ministries and local governments and report the results annually.

Committee member Je added, "There is a need to establish a function that strongly guides and supervises the establishment and implementation of fiscal soundness plans."

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