Ruling Party Emphasizes "Fiscal Soundness," Opposition Calls for "Active Spending"... Budget Parliament Begins Power Struggle Between Parties

Next Year's Budget Hearing... "No Burden Shift to Future Generations" "Abandoning Economic Stimulus?"

[Asia Economy Reporter Koo Chae-eun] At the public hearing on the next year's budget bill held by the Special Committee on Budget and Accounts on the 4th, the ruling party emphasized the restoration of fiscal soundness, while the opposition party demanded active expansionary fiscal policy, leading to sharp clashes. With the ruling and opposition parties showing stark differences in views from the outset, a full-scale power struggle is expected in the 'budget political battle' continuing until the end of the year.

Lee Cheol-gyu, the ruling party's budget committee secretary, said, "If we expand the budget to gain popularity by claiming it is immediately necessary for the current generation, increasing national debt, it will become a huge burden for the next generation," adding, "The current generation must not irresponsibly neglect the debt that future generations have to repay." Choi Chun-sik of the same party also stated, "The worst harm the Moon Jae-in administration inflicted on our economy is that it led people into fiscal addiction," and "Now, we need to seek solutions to this crisis in ways differentiated from the previous administration."

Park Jung, the Democratic Party's secretary, said, "Consumer price index is expected to rise to 3.3?3.9% next year, but the government's discretionary spending has decreased, which should be seen as giving up on budget input to stimulate the economy," adding, "If supplementary budgets occur, discussions on fiscal soundness by the government become meaningless, and ultimately, the current (fiscal soundness) argument seems like a temporary excuse." Kim Young-bae of the same party criticized, "Only the ultra-rich benefit from tax cuts, and the government is selling off national land to compensate for the lost tax revenue," calling it "a fiscal policy that rather oppresses the vulnerable."

Opinions of experts who appeared as witnesses also clashed. Kim Jeong-hoon, director of the Fiscal Policy Research Institute, analyzed, "Even if the national debt level rises to some extent, if it is not kept at an appropriate level, it can become a significant burden like in Japan," and "(With tax reform) the corporate tax rate, which was higher than the average for many, has been adjusted to the average level." Kim Woo-cheol, professor at the University of Seoul, argued about fiscal rules controlling government spending, "Setting minimum rules and using them to give domestic and international recognition that our finances are sound is an essential policy to maintain national credit rating and prevent falling into a risk zone during crises."

On the other hand, Jeong Chang-soo, director of the Nara Salrim Research Institute, said, "Based on experiences over the past 30 to 40 years, many experts think there is little evidence of tax cuts and trickle-down effects." Kim Yoo-chan, professor at Hongik University, pointed out, "To overcome overlapping crises, the government's active fiscal spending needs to continue not just in the short term but in the medium to long term," adding, "The way to manage without increasing fiscal deficits and national debt is not tax cuts but rather tax increases."

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