Economic Emergency... Ruling and Opposition Parties Compete Again to Increase Supplementary Budget

Record High 59 Trillion 2nd Supplementary Budget Bill to Undergo Full Review from the 16th

Ruling Party: "Will Further Examine Livelihood Issues"...Opposition: "Supplementary Budget Insufficient, Additional Support Needed"

[Asia Economy reporters Hyunju Lee and Boryeong Geum] Although the government has set the second supplementary budget for this year at a record high of 59 trillion won, there is growing likelihood that it will be further increased during the National Assembly's deliberation process. The opposition party has argued for expanding the scope and amount of support, and the ruling party is reportedly considering adding more beneficiaries in light of the upcoming June 1 local elections. However, if additional funds are injected, it could further fuel already high inflation, likely triggering considerable backlash.

The second supplementary budget bill submitted by the government to the National Assembly on the 13th will enter full-scale review starting with President Yoon Suk-yeol’s policy speech at the plenary session on the 16th. The ruling and opposition parties have agreed to review the budget bill by standing committees over two days on the 17th and 18th, followed by comprehensive policy questioning and subcommittee reviews at the Special Committee on Budget and Accounts on the 19th and 20th.

The Democratic Party of Korea evaluated the second supplementary budget as insufficient even before the review and expressed its intention to provide additional support. Yoon Ho-jung, the party’s emergency committee chairman, said at the Central Election Committee meeting held that day, "Although the supplementary budget has been submitted, there are many aspects to review," adding, "The Democratic Party will meticulously revise the government’s supplementary budget to ensure broad and full compensation for losses." Based on the 47.2 trillion won figure proposed by the party the previous day, they plan to prepare the supplementary budget and also push for legislation to apply loss compensation retroactively and expand its scope. Park Hong-geun, the party’s floor leader, dismissed the bill as a ‘half-hearted’ supplementary budget and said, "We will prepare a broad and substantial supplementary budget to ensure complete loss compensation without blind spots."

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho is holding a joint briefing with related ministers on the second supplementary budget for 2022 at the government Seoul office briefing room on the 12th. Photo by Kim Hyun-min kimhyun81@

The People Power Party, which proposed a supplementary budget of 59.4 trillion won?the largest ever due to excess tax revenue?is not free from criticism of providing cash-type support ahead of the elections. The party expressed its intention to consider adding more items related to livelihood in response to the Democratic Party’s offensive. Kwon Seong-dong, the party’s floor leader, said on a radio show that day, "The opposition is trying to gain votes by demanding more money than the government and ruling party initially proposed," but added, "We will sit down and discuss how much to raise or increase the budget in the National Assembly."

Experts have expressed concerns that the second supplementary budget, which mostly consists of cash-type support, could accelerate interest rate hikes and sharply increase inflation. Kang Sung-jin, a professor of economics at Korea University, said, "In a situation where inflation is a concern, all countries are trying to reduce liquidity, so it is contradictory for the government to increase it," adding, "Unnecessary parts of government spending, such as simple cash welfare or the Green New Deal, should be restrained." Sung Tae-yoon, a professor of economics at Yonsei University, also warned, "Such policies will continue to be repeated," and suggested, "Since fiscal spending has already expanded excessively and is causing significant problems, substantial market management will be necessary going forward."

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