[Interview] Lee Nak-yeon "Preparation Stage for a Running Start... No Objections from Party and Government on Sufficient Supplementary Budget"

Drawing the Line on Symptoms... Also Hinting at Institutionalizing Youth Allowance

Lee Nak-yeon, Leader of the Democratic Party of Korea./Photo by Dongju Yoon doso7@

[Asia Economy Reporters Park Cheol-eung and Jeon Jin-young] Lee Nak-yeon, leader of the Democratic Party of Korea, said regarding the progress of the 4th disaster relief fund, "(The ruling party and government) consultations are still in the ‘run-up’ preparation stage before full-scale discussions," adding, "There is no disagreement between the party and government on the principle of making a supplementary budget of sufficient scale before it is too late."

This appears to reflect a willingness to find a solution so that differences in opinions between the party and government over the payment targets do not escalate into conflicts. Lee and the Democratic Party are pushing for a ‘selective + universal’ payment, while Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, holds the position that only selective payments are possible considering the fiscal situation.

In an interview with Asia Economy on the 3rd, Lee compared the ruling party-government consultations on the 4th disaster relief fund to a long jump in athletics, saying, "Talking about the finish line before starting the run-up is premature and irresponsible." Regarding funding measures, he stated, "We can consider issuing government bonds and restructuring expenditures." While he intends to make a ‘sufficient’ supplementary budget before it is too late, more time is needed.

In his earlier speech on the 2nd at the National Assembly’s negotiation group leaders’ meeting, Lee said, "Our finances are relatively sound," and added, "There are times when the country’s treasury needs to be appropriately opened." When asked if this remark was made without sufficient consultation with the government side, he replied, "Not everything is approved before a speech. There was an exchange of opinions as needed." He drew a line on the possibility of tax increases to fund the disaster relief payments, saying, "From the perspective of tax legality, it is theoretically impossible," and "Tax increases or cuts can only be made if the law is amended."

"Generational approach becoming important in welfare by class... Youth allowances should also be provided"

Regarding the ‘National Living Standards 2030’ proposed as a new welfare system for the post-COVID era, Lee explained that it is a core vision not only as a presidential candidate but also at the Democratic Party level. He said, "It will broadly affect the lives of the people and will require more than 10 years of work," adding, "Under the Moon Jae-in administration, the party mainly played a role in supplementing or assisting national tasks, but this is the first time we are presenting a national vision. I believe it is a fitting vision for the party’s future."

He also hinted at plans to establish a system in the form of youth allowances. Lee said, "Our welfare system has been focused on class-based approaches such as low-income groups and the disabled, but with the increase in single-person households and changes in labor patterns, a generational approach will become important," adding, "(Youth) have been excluded from welfare targets, so we need to fill that gap from now on. It involves how to support education, employment, and entrepreneurship, and guaranteeing a minimum standard of living in the process, which is similar to the concept of youth allowances."

He also cited the Basic Livelihood Security Program as an example to explain the need to supplement existing policies even if they are not new systems. This seems to be a measure to raise the level of support. However, he was cautious about funding measures here as well. Lee said, "We are looking at it until 2030, and plans by year should be made regarding the minimum standards for income, housing, and other areas," adding, "After that, financial demand may arise. It is not that we are deliberately avoiding it; it is just not the stage yet."

"Mentioning amendments before enforcement of business community’s concern bills causes further disputes"

Regarding the government’s housing supply measures announced on the 4th, the day after the interview, Lee evaluated, "The supply volume is likely larger than many expected, and concerns about supply shortages are likely to be largely resolved," adding, "People are thirsty not only for quantity but also for diversity and homes that suit them, and meeting both of these demands will be possible to a considerable extent." He also said that the Democratic Party’s Future Housing Promotion Team, which he leads, is focusing on preparing mid- to long-term housing policy measures separately from this plan.

On the bills introducing class action lawsuits and punitive damages, which have raised concerns in the business community, Lee said, "There needs to be a process of gathering opinions, but it is not being considered in relation to elections." Some Democratic Party lawmakers have already proposed related bills, and the Ministry of Justice plans to submit two bills to the National Assembly next month. Although it is a period ahead of the April by-elections, discussions will proceed without linking them. Lee said, "(Regarding the two bills) there has been some non-intensive exchange of opinions. It is difficult to call it consultation, so it is not yet the stage for the party’s position to come out."

Regarding the Serious Accident Punishment Act and the ‘Economic 3 Laws’ (amendments to the Commercial Act and the Fair Trade Act, and enactment of the Financial Group Integrated Supervision Act), which passed amid controversy and where some have suggested supplementary legislation, he dismissed the idea, saying, "We reached a very difficult agreement, and talking about amendments before enforcement could cause further disputes." Regarding serious accidents, he proposed amending the government organization act to establish an Industrial Safety and Health Agency in his National Assembly speech on the 2nd.

Lee also emphasized tax credit enhancements and ESG (Environmental, Social Responsibility, and Governance) as ‘corporate incentives’ for implementing the COVID-19 profit-sharing system. He said, "Currently, the tax credit is set at 10%, but there are criticisms that it is insufficient, so there is a need to strengthen it," adding, "ESG has already been introduced by the National Pension Service and could be expanded to other pension funds. It might also be possible to prioritize companies that invest heavily in social causes or actively engage in carbon reduction efforts when making public procurement."

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