[Bill Cost Estimation Analysis] Conservatives Emphasize Fiscal Revenue Reduction, Progressives Focus on Fiscal Expenditure Increase

Analysis of Top 10 Estimated Costs
Democratic Party Emphasizes Multiple Fiscal Input Bills Including the National Pension Act
People Power Party Highlights Tax Burden Relief Including Amendment to the Individual Consumption Tax Act

[Asia Economy Reporters Park Jun-yi and Geum Bo-ryeong] An analysis of the top 1 to 10 bills with the highest estimated costs among those proposed during the first 130 days of the Yoon Suk-yeol and Moon Jae-in administrations revealed that progressive parties favored bills involving fiscal expenditures, while conservative parties favored bills that reduced fiscal revenues. It appears that the fiscal policies of both parties influenced the bills they proposed.

Most bills with large additional fiscal scales were related to welfare, such as the National Pension Act, Basic Pension Act, and National Basic Livelihood Security Act, with many proposed by members of the Democratic Party of Korea. The bill with the highest estimated cost was the "Amendment to the National Pension Act," primarily proposed by Jeong Chun-sook of the Democratic Party in 2017. The expected cost was a total of 1,558.2539 trillion KRW over 43 years, with an annual average of 36.2385 trillion KRW. This bill included provisions to increase the income replacement rate of the national pension by 0.5 percentage points annually, maintaining it at around 50% from 2028 onward.

Under the Yoon Suk-yeol administration, in May, Kim Hoe-jae of the Democratic Party also proposed the "Amendment to the Child Allowance Act." The bill aimed to expand the eligibility age for child allowances to under 12 years old and increase support for multi-child families by providing an additional 50,000 KRW monthly for the second child and 100,000 KRW monthly for the third child and beyond. The estimated cost was 15.7765 trillion KRW over five years, averaging 3.1553 trillion KRW annually.

Bills reducing tax revenues were notably proposed by the People Power Party. During the previous administration, in 2017, Yoon Han-hong, then a member of the Liberty Korea Party (the predecessor of the People Power Party), proposed the "Amendment to the Individual Consumption Tax Act." The bill aimed to halve the individual consumption tax on gasoline, diesel, and butane to alleviate the burden on the working-class economy. The estimated annual cost was 6.0246 trillion KRW.

Among the top 10 bills estimated to reduce tax revenues under the current administration, five were proposed by the People Power Party and five by the Democratic Party. In July, Kim Doo-kwan of the Democratic Party proposed the "Amendment to the Income Tax Act," which raised the taxable income brackets for low-income earners to reflect inflation. If enacted, the bill is estimated to reduce tax revenues by a total of 109.1203 trillion KRW over five years, averaging 21.8241 trillion KRW annually.

Kim Doo-kwan’s office stated, "Real incomes have significantly decreased due to inflation," adding, "This measure is intended to provide greater benefits to salaried workers."

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