[Budget Committee Interview] Lee Cheol-gyu "Local Currency Budget Only Increases Social Costs"

2023 Budget from Ruling and Opposition Party Budget Committee Secretaries
Lee Cheol-gyu, Ruling Party Secretary, on Concerns of Political Conflict in the National Assembly: "The People Must Act as a Balancing Force"
"What Effect Would There Be If Regional Currencies Were Issued Together Nationwide?"

Lee Cheol-gyu, the budget committee secretary of the People Power Party, is attending and speaking at the '2023 Budget Proposal Debate' held at the National Assembly on the 25th. Photo by Yoon Dong-joo doso7@

With the ruling and opposition parties agreeing on the schedule for the Budget and Accounts Special Committee to review next year’s budget bill, the 'budget war' will intensify starting next month. The ruling party emphasizes reducing spending to support the Yoon Seok-yeol administration’s sound fiscal policy, while the opposition insists that government finances should be expanded amid the economic crisis. In particular, the perspectives of both sides sharply diverge over the budget cut for local currency support. The opposition has protested the prosecution’s search of their party headquarters by boycotting the president’s state of the nation address for the first time in history. As the ruling and opposition parties continue their 'strong versus strong' confrontation, concerns are growing over whether the National Assembly can properly and timely review the Yoon administration’s first budget. We heard from the budget committee secretaries of both parties about the direction of the budget review.

[Asia Economy Reporter Lee Ji-eun] Lee Cheol-gyu, the ruling party secretary of the National Assembly’s Budget and Accounts Committee from the People Power Party, said ahead of the full-scale review of next year’s budget, "Even if it is unpopular at the moment, I highly appreciate the government’s shift to sound fiscal management that benefits the entire nation and considers fiscal sustainability." Regarding the local currency budget, which the government decided to cut entirely, he expressed a critical stance, saying it would "only increase social costs."

After attending the ‘2023 Budget Bill Debate’ held at the National Assembly on the 25th, Lee shared this budget review direction with Asia Economy reporters.

Lee particularly intensified his criticism of the local currency budget, which is expected to be the biggest point of contention between the ruling and opposition parties during the budget review. He argued, "What effect would there be if local currencies were issued nationwide all at once?" and added, "Local currencies create a ‘rich get richer, poor get poorer’ phenomenon because local governments with low fiscal independence cannot participate even if they want to." He continued, "In the past, local governments carried out these projects on their own, and during the COVID-19 pandemic, these were temporary subsidies, so it is impossible to operate them permanently."

The government began providing national subsidies for local currency issuance in 2018, focusing on employment crisis areas such as Gunsan. Since then, the local currency support budget peaked at 1.0522 trillion won last year during the height of the COVID-19 pandemic but was reduced to 605 billion won this year. The Yoon Seok-yeol administration has completely removed it from next year’s budget. The opposition is attacking this move as a "heartless budget."

At the debate, Lee clearly expressed his intention to reflect the Yoon administration’s ‘sound fiscal’ policy in the budget review. He said, "Any government will be very tempted to expand the budget after taking office, but even if it is unpopular at the moment, fiscal sustainability must be considered."

The possibility of expanding the social overhead capital (SOC) budget, which was used during economic recessions, has also decreased under the sound fiscal policy. The construction industry has demanded an increase in the SOC budget. Lee dismissed the possibility of expansion, saying, "The projects involving large investments have been completed, so next year’s SOC budget has decreased."

While calling the 24 trillion won expenditure restructuring "very meaningful," Lee said regarding the opposition’s criticism of ‘heating costs for senior centers,’ "If some cuts are inappropriate, we will carefully review and increase the budget during the review process." On concerns that the budget session could degenerate into a ‘political battle’ due to the cooling political climate, he said, "Ultimately, the people must play the role of a balancing force."

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