Opposition Absence Leads to 'Half-Empty' Policy Speech... Yoon Focuses Budget on Socially Vulnerable and Private Economic Sectors (Comprehensive)

-Political Climate Cools Rapidly... Budget Review Expected to Face Difficulties
-Yoon's Next Year Budget Address... "Protecting the Socially Vulnerable is a Fundamental Duty of the State"
-Focused Support on Private-Led Economic Sectors for New Growth Foundation... "Additional Fiscal Investment for Small Business Owners"

[Image source=Yonhap News]

[Asia Economy Reporters Baek Kyunghwan and Lee Gimin] President Yoon Seok-yeol visited the National Assembly on the 25th to deliver a policy speech on next year’s budget, focusing on the ‘protection of socially vulnerable groups.’ President Yoon emphasized, "Protecting socially vulnerable groups who suffer greater hardships during economic difficulties is a fundamental duty of the state." Concentrated support for the common people and socially vulnerable groups has been a consistent priority since President Yoon took office, and this policy direction and philosophy are fully reflected in next year’s budget. However, the Democratic Party of Korea did not attend the policy speech. While opposition lawmakers have previously boycotted policy speeches read by the Prime Minister, this is the first time in constitutional history that they have completely boycotted a policy speech delivered directly by the president without even attending.

In the morning policy speech on the 2023 budget at the National Assembly, President Yoon explained the background of the budget formulation, saying, "The budget submitted by the government contains comprehensive considerations and plans on how to respond to the global complex crisis and how to resolve livelihood issues." He particularly assessed the current economic situation as "amid a global trend of high inflation, high interest rates, and a strong dollar, financial market volatility has increased and uncertainty has risen." Based on the judgment that the pain of vulnerable groups and socially disadvantaged people is growing, President Yoon stated, "While pursuing fiscal soundness, we are also pursuing ‘welfare for the vulnerable’ by providing stronger support to the common people and socially vulnerable groups."

◆Yoon: "Protecting socially vulnerable groups is a fundamental state duty"= President Yoon presented detailed support measures for socially vulnerable groups. First, he explained that the standard median income was adjusted by the largest margin ever, increasing the maximum livelihood benefit payment for a four-person household, reflecting KRW 18.7 trillion in basic living security support. Additionally, he mentioned plans to expand social insurance support to low-wage workers, special-type workers, and artists, adding support for 278,000 more people. Measures to improve working conditions, such as installing rest facilities, were also included for 7,000 small workplaces with fewer than 50 employees where working conditions are poor.

He also emphasized tailored support for people with disabilities and single-parent families. President Yoon stated, "We will raise disability allowances for the first time in eight years, extend care hours for people with developmental disabilities to eight hours a day, and increase employment incentives for people with disabilities." He added, "We will expand support for call taxi use by people with severe disabilities and add 2,000 low-floor buses to maximize mobility rights for people with disabilities." Furthermore, the eligibility for single-parent child-rearing support will increase from the current 52% of median income to 60%.

Support measures for victims of last summer’s heavy rains were also revisited. President Yoon promised, "As revealed by this year’s flood damage, many victims lived in semi-basements and small rooms. We will establish interest-free loans for deposits to help these people move to safer housing environments and provide up to KRW 50 million in support if they relocate to private rental housing."

Support for victims of jeonse (long-term lease) fraud, which President Yoon has repeatedly emphasized, was also mentioned. He said, "To provide swift protection, we have established an emergency loan support system with a maximum limit of KRW 160 million." He also announced, "For our youth, we will newly supply 54,000 units of ‘Youth Cost-Price Housing’ and ‘First House near Subway Stations’ and introduce a Youth Leap Account to support long-term asset formation, while expanding the number of beneficiaries for the ‘Youth Tomorrow Savings Account.’"

In addition, he explained the budget to alleviate essential living expenses and shopping burdens for the common people caused by rising living costs. President Yoon said, "We will expand energy voucher support and increase the scale of discount coupons for agricultural, livestock, and fishery products from KRW 59 billion this year to KRW 169 billion, nearly tripling it." He promised, "We will expand stockpiles of key agricultural, livestock, and fishery products such as wheat and seafood to proactively respond to supply instability, and reduce farmers’ production costs by expanding direct payments to small and medium farmers and supporting the purchase of fertilizers and feed."

President Yoon Suk-yeol is greeting members of the People Power Party after delivering the budget address for the next year at the National Assembly plenary session on the 25th. Photo by Yoon Dong-ju doso7@

◆Focused investment in ‘advanced strategic industries’ and ‘science and technology’ for new growth foundations= The next year’s budget, structured on a sound fiscal policy, will focus support on the private-led economic sector. The aim is to strengthen the shaky economic foundation through support for core strategic technologies.

President Yoon emphasized, "We will foster advanced strategic industries and science and technology and support small and medium-sized and venture companies," adding, "We will build new growth foundations." First, to maintain the super-gap in memory semiconductors and secure competitiveness in system semiconductors, he promised to invest more than KRW 1 trillion in specialized workforce training, research and development, and infrastructure construction.

President Yoon said, "Restoring the collapsed nuclear power ecosystem is urgent," and added, "We will actively support nuclear power plant exports and support research and development of next-generation technologies such as small modular reactors (SMR) and nuclear power plant decommissioning technologies." He also revealed plans to invest KRW 4.9 trillion in research and development (R&D) to secure core strategic technologies and future technology markets, including quantum computing, aerospace, artificial intelligence, and advanced bio.

He also emphasized support for private investment-led startups. President Yoon said, "We will expand support for venture companies and startups and invest KRW 3.6 trillion in innovation projects such as smartization support and research and development for small and medium enterprises."

Additionally, President Yoon stated, "We will inject additional funds into debt restructuring and recovery support so that small business owners can fully recover from the COVID-19 impact and thrive again," and "We will provide a package of farming settlement support funds, customized farmland, and financial support to young farmers to lead agricultural innovation."

◆KRW 5.3 trillion for the three-axis defense system and KRW 3.2 trillion for supply chain response= Strengthening autonomous national defense was also declared. President Yoon announced that KRW 5.3 trillion will be invested next year to advance the Korean-style three-axis system, including Hyunmoo missiles, F-35A, Patriot performance upgrades, and counter-battery fire systems to respond to security threats. Furthermore, KRW 3.2 trillion will be invested to address supply chain crises, which have become a core of economic security.

This reflects President Yoon’s security philosophy of "building a strong nation that no one can challenge through robust defense capabilities, first-class veterans affairs, and boosting troop morale." He explained, "We will also expand investments for transitioning to unmanned and manned complex weapon systems such as robots and drones, and for power enhancement to prepare for future battlefields, including military reconnaissance satellites and cyber warfare."

He introduced plans to raise soldiers’ salaries from the current KRW 820,000 to KRW 1.3 million next year, aiming for KRW 2.05 million by 2025, ensuring reasonable compensation for military service is provided step-by-step every year. He also mentioned plans to raise veterans’ benefits by the largest margin since 2008 and increase honor allowances for war veterans to the highest level in history during his term. Regarding the salary increases for soldiers and veterans, President Yoon emphasized, "Respect and honor for dedication to the nation are the foundation of strong defense capabilities."

The investment plan to respond to economic security issues arising from supply chain crises was also included in the policy speech. President Yoon explained, "We must strengthen economic security capabilities to prepare for the intensifying wave of economic bloc formation," and "To respond to supply chain crises, we will expand overseas resource development investments and invest a total of KRW 3.2 trillion to stockpile minerals such as nickel and aluminum and diversify import sources."

◆Half-hearted policy speech... Budget review expected to face difficulties from the start= President Yoon explained the next year’s budget for nearly 20 minutes, but due to the Democratic Party’s absence, the new government’s budget policy speech was reduced to a ‘half’ event. While ruling party lawmakers responded with 19 rounds of applause during President Yoon’s 18-minute speech, opposition lawmakers fully boycotted the speech and greeted the president with protest slogans and silent demonstrations on the stairs of the National Assembly’s Rotunda Hall. With the political climate rapidly freezing due to high-intensity investigations, concerns are rising that the budget review for next year will face difficulties from the outset.

In the policy speech, President Yoon emphasized, "There is no distinction between ruling and opposition parties in overcoming economic and security crises," and "Cooperation from the National Assembly is urgent," but evaluations suggest that prospects for bipartisan cooperation have disappeared. The budget review, which officially began on this day, is unlikely to meet the legal deadline scheduled for December 2. To meet the deadline, the review must be completed by the end of next month, but the budget review is expected to deteriorate into a ‘political battleground,’ leading to rushed or disrupted deliberations. The government’s organizational reform plan, which includes abolishing the Ministry of Gender Equality and Family, and tax reform plans, which are key election pledges of the Yoon administration, have also become uncertain in the National Assembly.

The ruling party can blame the opposition for rushed reviews or failure to pass election pledges, while the opposition may feel increased pressure regarding responsibility, making the political calculations between the two parties even more complicated.

[Image source=Yonhap News]

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