Final Supplementary Budget Review of Moon Administration... Struggle Over 'Deficit Bonds'

Ahead of the presidential election, calculating supplementary budget public opinion... Ruling party 'government bond issuance' vs opposition 'expenditure adjustment', inevitable disagreement on funding sources

[Asia Economy Reporter Baek Kyunghwan] The People Power Party has put the brakes on the ruling party and government's plan to issue government bonds to secure funds for the supplementary budget. They emphasized that increasing the supplementary budget funds to over 40 trillion won should prioritize restructuring the existing budget. The scale of government bond issuance is expected to become the biggest point of contention in the ruling and opposition parties' supplementary budget discussions starting this week.

According to the National Assembly on the 3rd, the ruling and opposition parties will begin reviewing the supplementary budget by standing committees from the 4th. The current supplementary budget is aligned to minimize the government's fiscal burden. It totals 14 trillion won, including 9.6 trillion won for small business owners' quarantine support funds and 1.9 trillion won for compensation for losses of businesses that were suspended or restricted. The government plans to raise 11 trillion won of this through deficit government bonds and cover the rest with surplus funds from government funds. Both ruling and opposition parties appear to agree on increasing the government proposal to between 35 trillion won and a maximum of 50 trillion won.

The key issue is expected to be whether to issue deficit government bonds. The People Power Party expressed the view that deficit government bonds, which are national debt, should be minimized. Within the party, there is growing support for the opinion that "in order to reduce the burden on the next government, the ruling party's additional deficit government bond issuance plan should be carefully reviewed."

Kim Ki-hyun, the floor leader of the People Power Party, also stated in a radio interview that morning, "Government bond issuance should be minimized, and since the government's proposal does not include any restructuring of the expenditure budget, we will reduce and cut that part and prepare a budget to support necessary areas." He acknowledged the reality that, under the current National Finance Act, excess tax revenue can only be used after the April settlement, so reliance on deficit government bonds is unavoidable for now. In this regard, it is reported that the People Power Party has begun preparing a plan to restructure expenditures for this year's budget of approximately 607 trillion won.

On the other hand, the Democratic Party is gathering consensus to increase the supplementary budget through government bond issuance and other means via bipartisan agreement. A party official explained, "Since Candidate Lee mentioned an emergency financial order exceeding 50 trillion won (the day before), a broad supplementary budget review will be discussed to strengthen compensation for small business owners and self-employed losses," adding, "The goal is to request opposition cooperation and process it as quickly as possible."

With the ruling and opposition parties showing differences over government bond issuance, the ruling party's plan to pass the supplementary budget before the official election campaign starts on the 15th has become uncertain. The People Power Party maintains the position that the ruling party and government must agree on the increase and funding plan.

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