Presidential Office: "Yoon's Policy Speech Aims to Declare Policy Intentions to the International Community and Strengthen Credibility"

Characteristics of Yoon Administration's First Budget: Sound Finance, Welfare for the Vulnerable, and Future Preparation
Choi Sang-mok Chief Secretary "Strongly Hope for Confirmation by Legal Deadline"

[Image source=Yonhap News]

[Asia Economy Reporter Ki-min Lee] The Presidential Office stated on the 25th that President Yoon Suk-yeol's policy speech on next year's budget proposal to the National Assembly aims primarily to "solidify international credibility by declaring policy intentions to our National Assembly, citizens, market participants, foreign investors, and the international community."

This is interpreted as the Presidential Office directly explaining why President Yoon proceeded with the policy speech despite the ruling Democratic Party, the main opposition party, boycotting the speech for the first time in constitutional history.

Choi Sang-mok, Senior Secretary for Economic Affairs, said at a briefing held at the Yongsan Presidential Office on the afternoon of the 25th, "It is a legal obligation for the president to explain directly at the National Assembly. Such a policy speech carries significance beyond legal responsibility."

In addition to the constitutional and National Assembly Act obligations requiring the president to persuade the National Assembly on next year's budget proposal, the intention is to directly declare Korea's sound fiscal stance amid the global complex crisis and thereby maintain external credibility.

Senior Secretary Choi reiterated, "In a global complex crisis, delivering such a policy speech itself aims to strengthen global credibility."

Regarding the Yoon Suk-yeol administration's first budget, which is set with the priorities of ▲sound fiscal management ▲welfare for the vulnerable ▲future preparedness, he explained, "It is an action plan that translates various promises into numbers."

On the shift to a sound fiscal stance, he said, "It is important from three perspectives: external credibility, macroeconomic consistency, and fiscal sustainability," adding, "As seen in the UK case, harmoniously operating macroeconomic policies is crucial for maintaining investor trust in a severe global complex crisis."

He emphasized, "From a long-term perspective, in our economy where low birthrate and aging progress rapidly, switching to a sound fiscal stance is urgent to reduce the burden on future generations."

Regarding the emphasis on welfare for the vulnerable and future growth policies centered on fiscal support, he said, "As the global complex crisis prolongs, difficulties for vulnerable groups may increase, so protecting ordinary citizens and socially disadvantaged groups is a fundamental responsibility of the state," introducing, "Therefore, we have strengthened basic living security by raising the median income standard to the largest extent ever."

Senior Secretary Choi also added, "The budget includes support for dynamic private-led economic growth, such as a concentrated investment of 1 trillion won in semiconductors and training 200,000 innovative talents in promising fields."

He appealed, "The 2023 budget, which can be represented by sound fiscal management, welfare for the vulnerable, and future preparedness, will enter the National Assembly's budget review from next month," and expressed hope that "the budget proposal will be finalized by the legal deadline of December 2."

When asked by a reporter how to persuade the National Assembly amid the difficulty of processing the budget within the legal deadline, Senior Secretary Choi said, "Once the budget proposal is submitted to the National Assembly, officials from each ministry will provide thorough explanations during the National Assembly's deliberation process," adding, "Especially in the global complex crisis situation, we will explain that reducing policy uncertainty is the most important part."

He continued, "Since fiscal policy is one axis of macroeconomic policy, emphasizing that there is no distinction between ruling and opposition parties in a crisis situation and explaining this should lead to understanding," he expressed hope.

Regarding the reduction of the budget compared to the previous year for the first time since 2010, he explained, "The parts temporarily increased due to the COVID-19 situation are being reduced as they were temporary, and parts related to policy finance, which were somewhat ambitiously planned, are being streamlined," adding, "In fact, the industrial, small and medium enterprises, energy, and social overhead capital (SOC) sectors have decreased, aiming for efficient operation and investment."

In response to opposition criticism that the Yoon administration reduced key projects of the Moon Jae-in government, he said, "The previous government had policies led by fiscal spending. Since these policies were top-down without market demand, the demand was not properly identified," and countered, "The Yoon administration focuses on market demand, so although the scale has decreased, I do not think this means a reduction in effectiveness or efficiency."

Regarding President Yoon's remark in the policy speech that the previous government had "reckless fiscal management for political purposes," he pointed out, "National debt was about 600 trillion won when the previous government took office, but now it is at the scale of 1,000 trillion won," adding, "Although there were unavoidable aspects due to COVID-19, a significant portion of the national debt existed even before the pandemic."

He continued, "By increasing debt and liabilities, the government is shifting the burden to future generations," emphasizing, "If the balance between the current and future generations' burdens is not considered, fiscal sustainability is impossible and it does not fit the circumstances," and stressed, "This does not mean not to spend fiscal resources, but to spend well where necessary."

Regarding the plan to use 3.2 trillion won to respond to supply chains such as minerals, he explained, "An era is coming where supply chains are used as weapons or in competition between countries. Also, due to COVID-19, even without competitive intent, supply chains were disrupted causing difficulties," adding, "This has become more significant at the national level."

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