[Bill Cost Estimation Analysis] Reasons for the Decrease in Estimated Costs of Bills Proposed under the Yoon Administration

Economic and Political Experts Diagnose
Conservative 'Small Government' vs. Progressive 'Big Government' Principles at Work

National Assembly Building stock photo / Photo by Mun Ho-nam munonam@

[Asia Economy Reporters Bomryeong Geum, Juni Park] Experts are paying attention to the possibility that the ‘big government’ versus ‘tax cuts for the rich’ frame influenced the significant difference in cost estimates of bills proposed during the first 130 days of the Yoon Seok-yeol administration compared to the Moon Jae-in administration. The current government emphasizes easing tax burdens such as lowering corporate tax rates, but the opposition party criticizes this as tax cuts for the rich. The ruling party is negative about increasing fiscal spending.

Um Kyung-young, head of the Era Spirit Research Institute, said, "Paying a lot of taxes is basically a matter concerning the so-called wealthy people, so cutting taxes should be seen as a kind of tax cut for the rich."

In response, Sung Tae-yoon, professor of economics at Yonsei University, emphasized, "Reducing taxes should not automatically be seen as tax cuts for the rich; among taxes, it is actually right to reduce those that burden the economy," adding, "During the previous administration, taxes increased significantly, causing difficulties for the people."

There was also an evaluation that the tendencies advocating ‘big government versus small government’ were fully reflected. Lee Nae-young, professor of political science and diplomacy at Korea University and former director of the National Assembly Legislative Research Office, explained, "The conservative camp basically aims for a small government, so they reduce the budget." She viewed the Democratic Party as focusing on ‘big government.’ Professor Lee said, "The Democratic Party is accustomed to spending budgets not only on welfare but also as needed. However, the problem with the Democratic Party is that while they are good at increasing the budget, they lack concern about how to secure revenue for that budget."

Jung Chang-soo, head of the National Fiscal Research Institute, also said, "The Moon Jae-in administration likely aimed for a big government role, while the Yoon Seok-yeol administration is aiming for a small government."

Lee Jung-hee, professor of economics at Chung-Ang University, said, "Since the current government has a policy of being quite selective about fiscal matters, including establishing fiscal rules, it is likely that they are being quite strict about projects and budgets, which could explain the significant reduction in the amounts of bills," adding, "Even if a bill is proposed by a member of the National Assembly, the government still has to support it from a budgetary perspective."

Professor Lee Byung-tae of KAIST’s Department of Economics thought that the ruling People Power Party’s numerous bills predicting a decrease in tax revenue were made in this context. He explained, "Overall, the previous administration spent fiscal resources too recklessly, which will impose a heavy burden on future generations, and now that interest rates have risen significantly, the government’s interest costs on its debt have also increased," adding, "From that perspective, it is about keeping the government small."

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