Experts Say "Issuing Government Bonds for Welfare Without Tax Increase and Basic Income Poses Fiscal Risks"

Presidential Candidates' TV Debate Expert Review
Experts: "No Way to Cover Financial Needs by Candidates' Methods"
"Debate Effect Lost Due to Yoon-An Unification"

[Asia Economy Reporters Oh Ju-yeon, Koo Chae-eun, Lee Ki-min] Experts pointed out that regarding the presidential candidates’ advocacy for basic income and welfare without tax increases during the social sector TV debate on the 2nd, "Issuing government bonds is inevitable," and "This poses a risk to national finances and should be approached with caution."

However, following the debate, the dramatic unification of People Power Party presidential candidate Yoon Seok-yeol and People’s Party presidential candidate Ahn Cheol-soo led to evaluations that the final TV debate had little influence on deciding supporters’ preferred candidates.

The two leading candidates, Lee Jae-myung and Yoon Seok-yeol, emphasized expanding welfare without tax increases. Lee Jae-myung, the Democratic Party presidential candidate, stated that to fulfill his pledge of providing an annual basic income of 1 million won, he would secure funding through natural increases in tax revenue and expenditure restructuring instead of tax hikes. Candidate Yoon also mentioned that expenditure restructuring could reduce ineffective spending, as well as temporary budgets with low economic stimulus effects.

◆ "Fiscal coverage through restructuring is unrealistic" = However, experts diagnosed that this method alone is insufficient to cover the fiscal demand. Professor Kim Tae-yoon of Hanyang University’s Department of Public Administration said, "Excess tax revenue has increased, but short-term fiscal demands due to COVID-19 relief measures have amounted to tens of trillions of won," adding, "It is out of the question to cover the fiscal demands of the welfare pledges proposed by each candidate."

He continued, "Even in the case of government bond issuance, it is used temporarily during wartime or to overcome economic crises, but continuous issuance would adversely affect fiscal soundness."

Regarding basic income, Professor Kim also stated, "Basic income is another name for the Moon Jae-in administration’s income-led growth policy. Haven’t we seen that it was ineffective?" He criticized, "A budget of 50 trillion won to provide 1 million won per person annually will be ineffective."

Professor Sung Tae-yoon of Yonsei University’s Department of Economics also criticized, "While other individual pledges might be adjusted within existing policy budgets, basic income requires a massive and continuous budget, placing a heavy burden on finances."

On the 2nd, one week before the 20th presidential election, candidates from each party are taking a commemorative photo before the start of the 3rd invited candidates debate for the 20th presidential election, hosted by the Central Election Broadcasting Debate Commission, held at KBS in Yeouido, Seoul. From the left, Sim Sang-jung, Justice Party candidate; Yoon Seok-youl, People Power Party candidate; Ahn Cheol-soo, People’s Party candidate; Lee Jae-myung, Democratic Party of Korea candidate. Photo by the National Assembly Press Photographers Group.

Yoon Seok-yeol, the presidential candidate of the People Power Party, and Ahn Cheol-soo, the presidential candidate of the People Party, are shaking hands after concluding a unification press conference at the National Assembly Communication Office on the morning of the 3rd. Photo by the National Assembly Press Photographers Group

◆ "Effect of TV debate disappears due to Yoon-Ahn unification" = There is also an evaluation that the unification of candidates Yoon and Ahn has become a black hole absorbing the presidential election atmosphere, so the TV debate will have little impact on changes in approval ratings. Political commentator Lee Jong-hoon summarized, "Candidate Lee failed to provide clear answers to questions from Justice Party presidential candidate Sim Sang-jung, and Candidate Yoon continued to show weaknesses in details."

However, he added, "Since the debate repeated previously ongoing disputes such as Daejang-dong and basic income, the debate itself did not serve as a significant differentiator and is expected to be overshadowed by the opposition’s unification issue," and "Unless an unexpected adverse event occurs during the remaining period, the situation favors the opposition."

Professor Choi Chang-ryeol of Yongin University also said, "The key point of the previous day’s debate was how aggressively Candidate Ahn would attack Candidate Yoon, but their tie colors were the same, and the attacks were not more frequent compared to previous debates," adding, "The unification issue today is so significant that the debate itself will not be a variable affecting approval rating changes."

He further stated, "In the previous day’s opinion polls, 90% of supporters of the two major parties chose their party’s candidate, so excluding those without voting intentions, supporters are unlikely to change their preferences."

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