Fiscal Authorities in Last-Minute Dilemma Amid National Assembly's Pressure to Expand Supplementary Budget... Will It Become a 'Package Supplementary Budget'?

No Agreement on Quarantine Support Payments:
3 Million, 5 Million, or 10 Million Won?
Support Recipients Expected to Increase Significantly
Additional Spending Demands for Scholarships, Employment Stabilization Subsidies, and Family Care for Low-Income College Students

On the 9th, the Subcommittee on the Supplementary Budget Adjustment of the Special Committee on Budget and Accounts was held at the National Assembly in Yeouido, Seoul. 2022.2.9 Photo by National Assembly Press Photographers Group [Image source=Yonhap News]

[Asia Economy Reporter Lee Hyunju, Sejong = Reporter Son Sunhee] The Ministry of Finance has entered last-minute deliberations following the National Assembly’s final notice to increase the size of the supplementary budget to between 35 trillion and 50 trillion won. As a tug-of-war continues between the National Assembly and the fiscal authorities over the scale of the supplementary budget, the “one-point” supplementary budget, which was initially designed solely to support small business owners, is now likely to become a comprehensive “package supplementary budget” as various expenditure items have been added during the review process by the Special Committee on Budget and Accounts. The National Assembly has effectively set the deadline for passing the supplementary budget as February 15, before the official start of the presidential election campaign, and is putting pressure on the government.

According to political circles on February 10, a large number of COVID-19 support projects that were not included in the government’s supplementary budget proposal have emerged during the review by the Special Committee on Budget and Accounts. Lawmakers from both the ruling and opposition parties have argued that special-type workers (about 800,000 people), classified as a vulnerable group, should also receive support payments. However, it was pointed out that among special-type workers, some, such as delivery workers, have actually seen their income increase during the COVID-19 pandemic, while others, such as after-school instructors, have struggled due to reduced classes, making it necessary to determine whether there has been an income decrease. Additional proposals under review include a special scholarship for low-income college students to provide temporary living expenses, an emergency COVID-19 employment stabilization subsidy, and increased funding for family care expenses and other COVID-19-related expenditures.

There was heated debate but no conclusion regarding the unit amount for quarantine support payments. The Ministry of Economy and Finance insisted on maintaining the original amount of 3 million won, while the Ministry of SMEs and Startups, the responsible ministry, suggested 5 million won as appropriate, revealing a split even within the government. The ruling party showed support for the 5 million won proposal, while the opposition People Power Party repeatedly insisted that 10 million won should be provided. As a result, it remains uncertain how much the supplementary budget will ultimately increase.

With the scope of the supplementary budget expanding into a package even before the total amount is finalized, the Ministry of Economy and Finance is expected to face even greater difficulties. The ministry is examining expenditure reduction priorities and spending restructuring measures in order to prepare funding plans, as requested by the National Assembly by today, but it is proving difficult to reach a conclusion.

The differing positions of the ruling and opposition parties regarding the supplementary budget review is also an issue. The ruling party is pushing for a swift conclusion, while the opposition is focusing on securing funding sources. Maeng Sungkyu, the ruling Democratic Party secretary of the Special Committee on Budget and Accounts, predicted that a conclusion would be reached soon but drew a line by saying, “It is not yet time to discuss funding sources.” In political circles, February 14, the day before the official election campaign begins under the Public Official Election Act, is seen as the de facto deadline for passing the supplementary budget.

On the other hand, Ryu Seonggeol, the opposition People Power Party secretary of the committee, said, “We are clearly opposed to issuing government bonds,” and added, “We are trying to wrap up the supplementary budget review as soon as possible, but ultimately, it depends on how the government proceeds with spending restructuring.” However, even within the Democratic Party, there is a view that some level of spending restructuring is possible, so it is expected that additional discussion on funding plans will take place depending on the expenditure reduction priorities set by the Ministry of Finance.

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