Ye: "Government Budget Proposal, a 'Fiscal Free Rider' and a 'Double Standard Budget'"... Microscope Review Expected

Focus on Overcoming COVID Instead of Economic Stimulus
604 Trillion Won Budget Plan, Total Expenditure Up 51% in 5 Years

Kim Do-eup, Policy Committee Chairman of the People Power Party [Photo by Yonhap News]

[Asia Economy Reporter Park Jun-yi] The People Power Party criticized the 604 trillion won budget proposal submitted by the government and announced plans for a microscopic review. They pointed out that the proportion of investment in new government projects such as the New Deal is higher than major issues like COVID-19, housing, and youth problems, and that the budget amount is excessive.

Kim Do-eup, chairman of the People Power Party's Policy Committee, stated on the 2nd in the "People Power Party's Position on the 2022 Budget Proposal," "Next year's budget goes beyond expansionary fiscal policy, accelerating fiscal collapse, and is overflowing with cash-spending populist budgets solely for elections without fundamental solutions such as expanding housing and private sector jobs for housing and youth issues." He added, "Although it should be limited to a four-month budget as a year-end budget, the government shamelessly included a large number of new projects and 33.7 trillion won for New Deal projects that the next government should reconsider, recklessly spending taxpayers' money until the end of the administration and passing on debt, composing a fiscal free-rider budget."

He then pointed out five problems with the budget proposal. First, he criticized that the budget was prepared under a wrong diagnosis of the economic reality. He explained, "The government presents the basic direction of the budget as economic stimulus following the end of COVID-19 and overcoming new polarization. However, COVID-19 is still ongoing, so instead of economic stimulus, sufficient and prioritized budgets for small business owners to overcome COVID-19 should be included."

He also said, "The cause of new polarization lies in the failed income-led growth policy despite massive fiscal spending, yet the budget is a blame-shifting budget that tries to cover policy failures with taxpayers' money without any reflection or policy correction."

Next, he pointed out that the budget amount is excessive. Kim said, "The 2022 budget, prepared at 604.4 trillion won, is the worst budget that surpasses the first national debt of 1,000 trillion won (1,068 trillion won) and 50% (50.2%) of GDP. The Moon administration increased total expenditure by 204 trillion won (51%) in five years, while the people have only accumulated debt without income growth."

He also criticized, "According to the '2021-2025 Medium-Term Fiscal Expenditure Plan,' the current government set the budget to increase by an average of 8.6% annually but then abruptly lowered the total expenditure growth rate to 4-5% from 2023, a clear case of double standards."

Kim also pointed out the high proportion of New Deal and carbon neutrality in the budget. He said, "Direct support funds for small business owners suffering from COVID-19 are only 1.8 trillion won, while New Deal projects increased by 12.4 trillion won from this year to 33.7 trillion won, and 2.5 trillion won was newly allocated to the carbon neutrality fund." He added, "The government increased the total project scale of the mysterious Korean New Deal 2.0 unrelated to livelihood issues from 160 trillion won to 220 trillion won at the end of the administration and included 33.7 trillion won in next year's budget, resulting in an ultra-super budget of 604.4 trillion won and abandoning the medium-term fiscal plan like a discarded item."

Regarding the 10 trillion won budget for gift certificates, he criticized, "It is a budget that creates a gift certificate republic without reviewing side effects. Even though 23 trillion won worth of gift certificates were issued and distributed this year including supplementary budgets, it failed to prevent the chain bankruptcy and closure of small business owners due to COVID-19 response failure, yet they plan to distribute another 10 trillion won worth of gift certificates next year."

Kim emphasized, "The People Power Party will do its best to adjust next year's budget to align with the simple truth that early termination of COVID-19 is the best economic stimulus. Direct support budgets for small business owners suffering and shedding tears to protect their livelihoods must take priority over any other budget, and we will actively push for cuts in excessive new projects and New Deal budgets to increase related budgets."

The ruling and opposition parties are expected to clash over the budget in the last regular session of the Moon Jae-in administration, which began on the 1st. While the Democratic Party of Korea supports expansionary fiscal policy, the People Power Party plans a microscopic review to filter out election-oriented budgets.

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