[2024 City Policy Speech] Yoon "Government Prioritizes Price and Livelihood Stability" [Full Text]

Increased Budget Allocation for Strengthening National Systems and Protecting the Vulnerable

President Yoon Suk-yeol stated on the 31st, "The government will prioritize price stability and the stabilization of people’s livelihoods above all else and respond with full force," while explaining the 2024 budget proposal. This reflects the intention to actively implement price management and financial policies for ordinary citizens while maintaining the Yoon administration’s sound fiscal stance.

During his policy speech on the 2024 government budget and fund management plan held at the National Assembly plenary session, President Yoon said, "Prices felt by the public remain high, and the burden of living expenses is increasing due to prolonged high interest rates."

President Yoon mentioned, "The total expenditure for 2024 has been set to increase by 2.8%, the lowest level since 2005," adding, "During the budget formulation process for next year, we restructured expenditures totaling 23 trillion won."

He requested cooperation from the National Assembly, saying, "The resources secured through this will be further invested in strengthening the essential functions of the state such as defense, rule of law, education, and health, protecting the vulnerable, and securing future growth engines."

This policy speech by President Yoon is his third, following the speech on the supplementary budget held six days after his inauguration in May last year and the 2023 budget policy speech in October last year.

Below is the full text of President Yoon’s 2024 government budget and fund management plan policy speech

President Yoon Suk-yeol is delivering a policy speech related to the 2024 budget proposal at the National Assembly plenary session on the 31st. Photo by Hyunmin Kim kimhyun81@

Honorable citizens,

Speaker of the National Assembly Kim Jin-pyo, Deputy Speakers Kim Young-joo and Jung Woo-taek, also Representative Lee Jae-myung of the Democratic Party of Korea, Representative Lee Jeong-mi of the Justice Party, Representative Kim Ki-hyun of the People Power Party, Democratic Party Floor Leader Hong Ik-pyo, People Power Party Floor Leader Yoon Jae-ok, and members of both ruling and opposition parties, today I would like to explain the government’s policy direction and the next year’s government budget to the people and the National Assembly.

Recently, the domestic and international conditions surrounding our economy remain challenging. Globally, high interest rates and high inflation persist, the global economy is contracting, and world trade this year is expected to grow at an unprecedented rate of around 0%. In addition, the Ukraine-Russia war combined with the Israel-Hamas armed conflict has increased global security risks, further destabilizing the world economy. Due to the global economic downturn, our economy, which is highly dependent on external factors, is slowing, and difficulties in people’s livelihoods are intensifying, especially among vulnerable groups.

In response, the government is managing macroeconomic risks with heightened vigilance while focusing on economic recovery and stabilizing people’s livelihoods. We are monitoring the economic security situation 24/7, reviewing contingency plans, and preparing for swift and timely responses at all times.

According to the Bank of Korea’s GDP growth rate indicator for the third quarter released last week, our economy is expected to grow more in the second half of the year as forecasted at the end of last year and early this year, and to recover above the potential growth rate next year, surpassing major countries. The recovery is driven by the continued rebound in semiconductor exports, our main export item, along with improvements in exports of automobiles, shipbuilding, secondary batteries, and defense products. The government will strengthen efforts to expand exports and investment to further support this recovery and focus on domestic demand recovery as well. Although economic indicators that had been sluggish are gradually improving, difficulties in people’s livelihoods persist. Thanks to reductions in fuel taxes and tariffs and management of public utility fees, Korea’s inflation rate is somewhat lower compared to major countries.

However, prices felt by the public remain high, and the burden of living expenses is increasing due to prolonged high interest rates. The government will prioritize price and livelihood stabilization above all policies and respond with full force. We will operate a pan-government price stabilization system focusing on managing prices of daily necessities, reduce the burden of essential living expenses such as housing, transportation, and communication for vulnerable groups, and prepare detailed livelihood stabilization measures that people can feel. Additionally, we will strengthen efforts to alleviate burdens caused by prolonged high interest rates through expanded financial supply for ordinary citizens.

Honorable members of the National Assembly,

Over the past year and a half, the government has pursued economic policies aimed at improving the economic structure centered on the market and ensuring fiscal sustainability. We have also laid the foundation to become a global leader in advanced industries. We have worked hard to secure a super-gap in semiconductors and batteries through the creation of the world’s largest system semiconductor cluster and financial and tax support, and I thank the National Assembly for its interest and cooperation during this process. Furthermore, we have prioritized welfare policies to protect the vulnerable and have strived to ensure that the state’s support reaches those in need without omission. I believe this is for our future.

We have also worked on bold medical reforms that save lives and regions, and on realizing a local era where it is good to live anywhere, centered on opportunity development zones and education freedom zones. The government has devoted efforts to three major reforms for Korea’s future and future generations, especially making steady preparations for pension reform. We have accumulated scientific evidence through over 80 meetings with Korea’s top experts, listened to public opinions through 24 in-depth interviews by social strata, and conducted thorough public opinion surveys. The vast data prepared will be valuable for structural reforms of the pension system, including the comprehensive reform of the National Pension. The government will actively participate and do its best to support the National Assembly until bipartisan discussions finalize pension reform legislation.

The government has promoted labor reforms to create a labor market based on fairness and common sense and to enhance the rights and interests of all workers. While fully guaranteeing lawful labor movements, we have responded to illegal acts regardless of labor or management according to law and principles. Recently, the two major labor unions decided to disclose their accounting. Although late, this is welcome, and I thank many who worked hard to reach this decision. The government will also strive to spread transparent and trustworthy labor movements through this accounting disclosure. I ask both labor and management to join labor reforms for Korea’s and youth’s future.

The government has steadily pursued education reforms that respect diversity and openness and establish a fair education system. To keep up with fierce international competition, nurturing talent based on diversity and openness is very important. Meanwhile, we are eradicating the long-standing private education cartel and realizing fair admissions so that anyone can achieve their dreams fairly. We have taken a big step toward normalizing school sites by revising the four laws protecting teachers’ rights. I thank the National Assembly again for cooperating in revising these laws. We are actively promoting the integration of childcare and early childhood education and the Neulbom School to provide world-class childcare services that parents can trust. The government will do its best to reform education so that our children can grow into internationally competitive talents through a diverse, open, and fair system, breaking away from a uniform framework.

Korea’s birth rate is at the world’s lowest level, a very serious situation. The causes are diverse, including economic and social burdens related to childbirth and child-rearing, but it is likely the result of the youth generation’s anxiety about our society. To escape the dark tunnel of low birth rates, structural reforms across the economy and society that give hope to future generations and enable sustainable growth of our society are necessary. I ask for your deep interest and support for pension reform, labor reform, and education reform.

Honorable citizens and members of the National Assembly,

Strong security is the cornerstone of the economy. While strongly responding to North Korea’s illegal provocations, we are strengthening deterrence against nuclear missile threats. We have activated the Korea-US ‘Nuclear Consultative Group (NCG)’ to elevate the alliance’s extended deterrence level. This year, marking the 70th anniversary of the Korea-US alliance, we have established a global comprehensive strategic alliance covering security, economy, advanced technology, information, and culture. The Korea-US economic security cooperation mechanism, which operates closely amid the global supply chain crisis, will further strengthen our crisis management capabilities. Also, strategic alliances in advanced fields such as semiconductors, AI, and space will provide more opportunities and jobs for our companies and citizens.

Economic cooperation and business between Korea and Japan have begun to revive. Japan has lifted export restrictions on semiconductor materials, the Korea-Japan whitelist has been restored, and currency swaps have resumed. The number of visitors traveling between Korea and Japan this year is approaching an all-time high of about 10 million annually, reflecting mutual goodwill and the desire for exchange between the peoples of both countries.

Furthermore, based on the Korea-US-Japan security and economic cooperation system established at Camp David last August, trilateral cooperation in advanced technology has deepened, and Korea’s strategic role in the Indo-Pacific region and on the global stage has been strengthened. With China, we met President Xi Jinping in November last year and Premier Li Qiang in September this year, respectively, confirming mutual support for free trade and multilateralism.

Since August this year, group tourism from China has resumed, revitalizing people-to-people exchanges. The government will continue mutually beneficial cooperation with China and enable more opportunities and benefits for companies and citizens of both countries.

I place diplomacy at the center of the economy and am willing to go anywhere in the world where our people and companies are active. Following last year, I attended the UN General Assembly, NATO, G20, and ASEAN this year, holding multilateral and bilateral meetings with world leaders. I visited the United States, Japan, Vietnam, Poland, Saudi Arabia, UAE, Qatar, and held bilateral summits. In the year and a half since my inauguration, I have held 142 summits with 93 countries. During bilateral summits with three Middle Eastern countries, exports and orders worth 79.2 billion dollars, about 107 trillion won, were made between companies of both countries. We will strengthen strategic cooperation between governments to expand cooperation with the Middle East, which has been cultivated since the 1970s in energy and construction, into future advanced fields including bio, medical, smart farms, digital, nuclear power, and defense industries. The government will also actively support young entrepreneurs and small and medium-sized enterprises to enter dynamic and high-growth potential markets such as India, Vietnam, and Indonesia.

Honorable members of the National Assembly,

Our government’s fiscal management stance is sound finance. Sound finance is not simply about reducing expenditures but about using taxpayers’ money efficiently and appropriately. Sound finance is crucial domestically for price stability, externally for maintaining national creditworthiness, and to avoid passing on unbearable debt to future generations. Recently, the International Monetary Fund (IMF) praised Korea’s sound fiscal stance as the ‘right direction,’ and international credit rating agencies cited fiscal soundness efforts as the most important factor in maintaining Korea’s sovereign credit rating. The total expenditure for 2024 has been set to increase by 2.8%, the lowest level since 2005, maintaining a sound fiscal stance.

During the budget formulation process for next year, the government restructured expenditures totaling 23 trillion won. All fiscal projects were reviewed from a zero base to meticulously identify and adjust expenditures that did not align with the purpose and intent of budget items or were unnecessary or improper. The resources secured through this will be further invested in strengthening essential state functions such as defense, rule of law, education, and health, protecting the vulnerable, and securing future growth engines.

During difficult economic times, we will provide stronger support to ordinary citizens, vulnerable groups, and the socially disadvantaged who suffer more. The livelihood benefit payment guaranteeing the minimum living standard for citizens has been raised by 213,000 won to 1,834,000 won for a four-person household. We will provide one-on-one dedicated services to severely disabled persons with developmental disabilities and expand individual care pilot services nationwide for cases where family care is impossible, establishing a 24-hour support system to ease the difficulties of families with disabled members. The allowance for youth preparing for independence will be increased by 100,000 won monthly, a 25% increase, and full tuition will be supported for all youth in basic and near-poverty households. We will provide low-interest loans to a total of 120,000 small business owners and subsidize the purchase of high-efficiency heating and cooling equipment, supporting up to 5 million won annually for such purchases.

Regarding essential state functions such as public safety, defense, and administrative services, we will use taxpayers’ money faithfully to ensure citizens’ safety and convenience more thoroughly. To respond swiftly to ‘random crimes,’ we will reorganize the police organization to focus on public safety and allocate police budgets to enhance public safety capabilities. To protect citizens from flood damage, we will resume dredging and maintenance of rivers and expand early flood warning systems nationwide. We will increase short-term service incentives for junior military officers and promptly implement ‘zero rusty water barracks’ in the frontline to improve welfare for soldiers dedicated to national security and citizens’ safety. Military pay will be increased by 350,000 won next year, steadily progressing toward achieving ‘military pay of 2.05 million won’ by 2025.

We will strategically support our citizens and companies in pioneering and operating in global markets and expand the official development assistance (ODA) budget to about 6.5 trillion won to contribute responsibly to the international community as a global pivotal country. Budget allocation will focus on creating quality jobs and securing growth engines.

To support overseas orders in nuclear power, defense, and plant sectors, we will reinforce the capital of export finance institutions to expand export financing supply. We will invest 4.4 trillion won in AI, bio, cybersecurity, and building a digital platform government, and increase public stockpiling of critical minerals to prepare for supply chain instability.

To reduce burdens related to childbirth and child-rearing, we will increase parental allowances and prioritize allocation of public sale and rental housing to households with newborns.

Although the R&D budget has quantitatively increased significantly from about 20 trillion won over three years since 2019 to 30 trillion won, there have been many calls for qualitative improvement and expenditure restructuring to create future growth engines. National R&D budgets should be used to develop basic foundational technologies and next-generation technological capabilities that are difficult for the private sector and market to invest in. This budget proposal significantly expands R&D support for advanced AI digital, bio, quantum, space, and next-generation nuclear power. We also aim to support global joint research by our talents necessary to lead foundational and next-generation technology competition. National fiscal R&D for foundational, next-generation, and cutting-edge leading fields will continue to be discovered and expanded to lead future growth engines. Additionally, R&D investment will be expanded in technology development fields and deep tech areas such as artificial intelligence, machine learning, and autonomous driving, where small and medium-sized enterprises find it difficult to invest due to lack of funds.

While the R&D budget will continue to discover support areas and increase support scale, the 3.4 trillion won secured through expenditure restructuring this time has been allocated to provide stronger support to about 3 million socially disadvantaged and vulnerable groups. The livelihood benefit for a total of 1.23 million basic livelihood security households has been increased by up to 213,000 won per household, enabling an additional 1.5 trillion won in livelihood benefits.

Also, by relaxing income criteria for single-parent families receiving 210,000 won monthly child-rearing support, an additional 32,000 people will receive child-rearing support, and 60,000 children from multicultural families will newly receive up to 600,000 won annually for educational activity expenses. Scholarships for 670,000 low-income university students have been increased by an average of 8%. Regarding concerns about employment instability raised during the adjustment of national fiscal R&D expenditures, the government will carefully monitor and prepare supplementary measures.

Honorable citizens,

Speaker Kim Jin-pyo and members of the National Assembly,

Recently, high oil prices, high interest rates, and high inflation have increased difficulties in people’s livelihoods. I once again ask for the National Assembly’s active interest and cooperation to ensure that the budget prepared by the government is executed without delay to alleviate the burden on people’s livelihoods. Please pay special attention to ensuring that the increased livelihood benefits for 1.7 million basic livelihood security recipients and the increased national scholarships for 1 million university students and youth are properly implemented.

Also, please help ensure that the national fiscal infrastructure budget, which will lead 674 trillion won in private investment, is executed in a timely manner. For example, semiconductor and secondary battery cluster infrastructure projects, high-speed rail, and new airport construction projects are not only catalysts for private investment but also very important for securing economic momentum.

The government will sincerely provide related materials and explanations requested by the National Assembly during budget deliberations and actively cooperate in budget review. I also ask for members’ special interest and cooperation regarding bills pending in the National Assembly that will revitalize the livelihood economy, such as the National Finance Act, Subsidy Management Act, Industrial Bank Act, and Space Aviation Agency Act, along with the budget proposal.

Honorable members of the National Assembly,

The global economic instability and security threats we face now require national and bipartisan cooperation. I ask you to join forces to overcome the complex crises at hand. Let us all, together with the people, create a history of overcoming crises and making a new leap forward. Thank you very much.

President Yoon Suk-yeol enters the plenary hall at the National Assembly in Yeouido, Seoul, on the 31st to deliver the policy speech on next year's government budget, greeting Lee Jae-myung, leader of the Democratic Party of Korea. Photo by Kim Hyun-min kimhyun81@

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