Regarding 'Fiscal Soundness,' Han Deok-su says "Negligent Management So Far" vs. Opposition Shouts "Why Blame Previous Government?"

Third Day of Government Questioning, Economic Sector Inquiries
Democrats Mention Need for Supplementary Budget
Han Deok-su "Fiscal Expansion Difficult... Must Tighten Belt"

On the third day of the National Assembly's government questioning on the 7th, the government, which views the current economic situation as a crisis and intends to continue fiscal austerity, and the Democratic Party, which sees the need for a supplementary budget (추경) to support the working-class economy, engaged in a heated debate. During this process, Prime Minister Han Duck-soo pointed out that government spending had increased during the previous Moon Jae-in administration, criticizing it as "reckless management," which led opposition lawmakers to shout, "Why blame the previous administration?"

Prime Minister Han Duck-soo is responding to lawmakers' questions during the government-related economic inquiry held at the National Assembly on the 7th. Photo by Hyunmin Kim kimhyun81@

On that day, Democratic Party lawmaker Park Beom-gye criticized Prime Minister Han, saying, "All three major industrial activity indicators?production, consumption, and facility investment?declined in July," adding, "The IMF has revised South Korea's economic growth rate several times this year, lowering it from 2.7% last year to 1.4% recently. For the past 25 years, South Korea's GDP growth rate has always surpassed Japan's, but it was reversed under the Yoon Seok-youl administration."

Prime Minister Han responded, "The economy is in a very difficult situation. Due to high interest rates, high exchange rates, and high inflation worldwide, we cannot freely use fiscal expansion or monetary easing policies as we did in the past," adding, "It is right for our government and citizens to tighten their belts a bit more and secure new growth engines to achieve sustainable growth by steering policy in that direction." He said, "Next year's budget is set at 2.8%, the lowest recent growth rate, and many people ask if it is possible to maintain fiscal austerity in an election year," emphasizing, "That is a political perspective, but from an economic standpoint, even if it is painful, we must tighten our belts."

Park said, "South Korea's fiscal soundness is not that precarious. Therefore, if it can help prevent the collapse of the working-class economy and people's livelihoods even a little, there is a need for a supplementary budget through the issuance of 35 trillion won in government bonds."

In response, Prime Minister Han said, "I find it difficult to agree," adding, "If we run a supplementary budget and increase spending again while tax revenues are already in deficit, the deficit will only grow."

When Park asked again, "Then, even if not up to the 35 trillion won supplementary budget demanded by the opposition, are you willing to prepare a supplementary budget of at least 10 trillion won for small business owners and self-employed people who are truly struggling?" Han replied, "It is difficult to accept." He added, "Although the spending is small, we are doing our best to consider the socially vulnerable and financially weak within that."

Lawmaker Jeong Tae-ho from the same party pointed out that while the government worries about fiscal spending, it continues to implement tax cuts for the ultra-rich.

Prime Minister Han Duck-soo is responding to a lawmaker's question during the government-related economic inquiry held at the National Assembly on the 7th. Photo by Kim Hyun-min kimhyun81@

Jeong asked, "If you are so concerned about fiscal matters, why did you cut corporate taxes?" He criticized, "There was no increase in investment or consumption. Also, there is the problem of reduced tax revenue," adding, "Because of the decrease in tax revenue, even if you want to tighten the budget significantly, you cannot. Isn't a nearly 50 trillion won negative tax revenue deficit predicted this year? This is the result of this government's economic failure."

He said, "If you talk about fiscal soundness and worry about national debt issues, shouldn't you increase the fiscal scale? Then you should not cut taxes," pointing out, "I understand cutting taxes for the poor, but why do you do such a foolish thing as cutting taxes for ultra-rich corporations, worsening fiscal capacity?"

Prime Minister Han replied, "We can no longer do so because of reckless fiscal management until now and the 400 trillion won debt," which led to loud shouts from opposition lawmakers in the meeting hall.

Jeong raised his voice, saying, "During the first to third years of the Moon Jae-in administration, the rate of increase in the national debt ratio was much lower than in previous governments. Although the national debt ratio increased for two years during COVID-19, the economy was well revived," adding, "The corporate taxes collected from the revived economy amounted to an additional 53 trillion won, which was used for the first supplementary budget under the Yoon administration. If the economy had been well revived and handed over, why do you keep blaming the previous administration?"

As the disturbance grew louder, Deputy Speaker Kim Young-joo stepped in, saying, "The members are speaking too much right now, so neither the questions nor the answers can be heard," and mediated, "Even if you have opinions, please listen to the questioning member's words and also listen to the answers."

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