Is It 12 Trillion or 20 Trillion... Party-Government Conflict Rekindled

Agreed on Pre-selection then Broad Distribution
Democratic Party Demands at Least 20 Trillion Won... Fiscal Authorities Offer 12 Trillion Won, Large Gap
Supplementary Budget Proposal to be Submitted in Early March... Tight Time for Party-Government Agreement

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] The ruling party and the Ministry of Economy and Finance continue to engage in a tug-of-war over the scale of the supplementary budget for the 4th disaster relief fund. Although there is agreement on the ‘support method’ of providing targeted support first and universal support later, the dispute now centers on the total amount to be distributed. Inside and outside the Democratic Party of Korea, a minimum of 20 trillion won or more is being proposed, while the financial authorities have set a maximum limit of around 12 trillion won, making it difficult to bridge the gap.

On the 17th, Kim Jong-min, a Supreme Council member of the Democratic Party of Korea, appeared on the radio and said, "At least 20 trillion won is necessary," adding, "The Ministry of Economy and Finance agrees that the scale should be significantly increased from before, but there seems to be a difference in the extent of the increase between the party and the ministry." Yeom Tae-young, also a Supreme Council member of the Democratic Party, pointed out on the radio that "Compared to recommendations from the IMF or the World Bank, the response has been rather passive." Yeom especially joined the pressure on the Ministry of Economy and Finance, saying, "In this comprehensive disaster situation, it is right to actively increase fiscal spending."

Kim Tae-nyeon, floor leader of the Democratic Party of Korea, is attending the party strategy meeting held at the National Assembly on the 16th and delivering opening remarks. Photo by Yoon Dong-joo doso7@

Within the ruling party, figures ranging from a minimum of 20 trillion won to a maximum of 30 trillion won have been mentioned for the 4th disaster relief fund, but the Ministry of Economy and Finance is reported to have proposed about 12 trillion won at the ruling party-government meeting, up from the initial 10 trillion won range. The gap between 12 trillion won and 20 trillion won reflects significant differences between the two sides regarding the target recipients and the scale of support. The Democratic Party emphasizes support for vulnerable groups outside the formal system, such as street vendors, platform workers, and new merchants, who have been identified as ‘blind spots.’ They also argue that the support amount should be larger than that of the 3rd disaster relief fund (up to 3 million won per business).

However, the Ministry of Economy and Finance takes a cautious stance because it is difficult to determine the criteria for distributing disaster relief funds to street vendors or platform workers whose income is hard to verify. Deputy Prime Minister Hong also expressed only a general position at the National Assembly’s Planning and Finance Committee full meeting the previous day, stating, "We will carefully review how far to cover the blind spots."

Amid ongoing disagreements between the ruling party and the government, a meeting scheduled for the 19th at the Blue House between President Moon Jae-in and the Democratic Party leadership is expected to serve as a catalyst for reaching a ruling party-government agreement. The government aims to submit the first supplementary budget bill related to the 4th disaster relief fund to the National Assembly in early March, so there is a tight timeframe of about ten days to reach an official or unofficial agreement. Meanwhile, the scale of the 1st disaster relief fund, which was distributed to all citizens, was 14.3 trillion won, while the 2nd and 3rd selective support funds were 7.8 trillion won and 9.3 trillion won, respectively.

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