This Year's First Supplementary Budget, Around 20 Trillion Won... Final Plan to Be Announced by Weekend

Government Agrees to Ruling Party's Demand for '20 Trillion Won Supplementary Budget'
Disagreement Between Ruling Party and Government Over 'Uniform Disaster Relief Payment for Bottom 40% Income Bracket'... Focus on President Moon's SuBo Message

[Sejong=Asia Economy Reporters Son Seon-hee and Jang Se-hee] The Democratic Party of Korea and the government have reached a consensus to set the supplementary budget (추경) including the 4th disaster relief fund payment at around 20 trillion won. After a tug-of-war between 12 trillion won and 20 trillion won, it appears that the government accepted the ruling party's demand. The ruling party insisted on providing up to 1 million won (based on a four-person household) to the bottom 40% income group, but the government has expressed reluctance, making the payment target and the expansion of the payment scale for small business owners the final points of contention.

According to the ruling party and government on the 22nd, the government is currently reviewing the Democratic Party's supplementary budget proposal and the government's own plan. A government official stated, "The party is emphasizing that the budget should be set at least above 20 trillion won to cover blind spots."

In this regard, Hong Ik-pyo, Chairman of the Democratic Party Policy Committee, Kim Sang-jo, Chief of the Blue House Policy Office, and Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, are scheduled to hold a private high-level meeting among the ruling party, government, and Blue House to discuss the size of the supplementary budget and payment targets. On the morning of the same day, Lee Nak-yeon, leader of the Democratic Party, pressured by announcing a ‘final deadline’ at the Supreme Council meeting, stating, "We will agree on a supplementary budget reflecting broad and substantial disaster relief payments by the 28th."

The key issue is whether to provide a lump-sum disaster relief payment to low-income groups. It has been confirmed that the ruling party proposed a lump-sum payment of up to 1 million won to households in the bottom 40% income bracket. This means providing 1 million won for households of four or more, 800,000 won for three-person households, 600,000 won for two-person households, and 400,000 won for single-person households, similar to the nationwide (1st) disaster relief payment last year but only for low-income groups.

However, the government holds a negative stance, arguing that this is effectively ‘universal’ in nature and that if eligibility is determined by specific criteria, fairness controversies cannot be avoided. Identifying the bottom 40% income group is not an easy task, and there is also the problem of overlapping payments with other social benefits.

At the Blue House senior secretaries and aides meeting scheduled for the afternoon, President Moon Jae-in is expected to emphasize ‘resolving income inequality’ and mention the disaster relief fund issue. Depending on President Moon’s message, a compromise is likely to be reached in the high-level ruling party-government-Blue House discussions.

The supplementary budget formulation and the 4th disaster relief fund payment plan will be finalized after discussions this week, no later than early next week. The ruling party and government plan to hold additional private consultations around the 24th and then announce the final plan through a public ruling party-government meeting over the coming weekend.

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