Opposition's Landslide Victory... Expansionary Fiscal Policy and Economic Democratization Gain Momentum

Democratic Party and Joguk Innovation Party Compete in Legislation
Likely to Drive Yellow Envelope Act, Grain Management Act, and More

Following the overwhelming victory of the opposition parties, including the Democratic Party of Korea, in the April 10 general election, it is expected that progressive economic policies such as expansionary fiscal policy and economic democratization will be actively pursued. As the People Power Party managed to hold the minimum blocking line against constitutional amendments, a strong confrontation between the ruling and opposition parties, even more intense than in the 21st National Assembly, has become inevitable. In particular, there is a high possibility that legislative tug-of-war over the amendment to the Labor Union and Labor Relations Act (the Yellow Envelope Act) will reoccur.

According to the Central Election Commission on the 11th, with 100% of the votes counted, the Democratic Party and its satellite party, the Democratic Union, secured 175 seats; the People Power Party and its satellite party, the Future of the People, won 108 seats; the Justice Innovation Party obtained 12 seats; and the Reform New Party gained 3 seats. The New Future Party and the Progressive Party each won one constituency seat. While the Reform New Party, which claims to represent the third political bloc, is expected to hold the casting vote depending on the issue, the opposition bloc is predicted to secure around 189 seats.

Looking at the composition of the assembly, the opposition bloc’s seats fall short of the constitutional amendment blocking line of 200 seats, which represents two-thirds of the total members. Accordingly, although the opposition can use the fast-track procedure by surpassing the 180-seat threshold required for cooperation under the National Assembly Advancement Act to effectively pass all bills with their own seats, the basic structure of a minority ruling party and majority opposition, which is subject to the president’s veto power, remains.

However, changes in substance are inevitable. The Justice Innovation Party, which has a more progressive stance than the Democratic Party, is likely to attempt to form a negotiating group in the National Assembly. Justice Innovation Party leader Cho Kuk has expressed his intention to form a negotiating group by allying with smaller parties, and the Democratic Party has indicated its willingness to lower the requirements for forming a negotiating group. Consequently, there is a possibility that a third progressive negotiating group will emerge alongside the existing ruling and opposition parties. If the Justice Innovation Party forms a negotiating group by allying with minor parties, the negotiation dynamics between the ruling and opposition parties will inevitably change, potentially increasing the political power of the Justice Innovation Party.

Additionally, within the People Power Party, individual members’ voices are expected to grow stronger than the party line. As the ruling party leadership was previously anxious over special investigations such as the Deutsche Motors stock manipulation probe involving First Lady Kim Keon-hee, they now face the challenge of appeasing their members to prevent rebellion votes during major political decisions. Moreover, it is anticipated that ruling party lawmakers will pursue more independent actions than before following the general election.

Therefore, confrontations are expected to continue from the very stage of organizing the 22nd National Assembly. Difficulties are inevitable in issues such as the distribution of vice-speaker positions, standing committee assignments, and which party will control the Legislation and Judiciary Committee. Since the ruling party is at a numerical disadvantage, it is likely to engage in public opinion campaigns outside the assembly to appeal directly to public sentiment.

The Democratic Party is expected to engage in clearer legislative competition due to the influence of the Justice Innovation Party as a competitor. They are likely to push forward bills such as the Yellow Envelope Act and the Grain Management Act, which President Yoon Suk-yeol had vetoed. In addition, there is a high chance they will attempt tax reforms, including corporate tax changes.

Furthermore, bills that Democratic Party leader Lee Jae-myung had attempted to legislate, such as the Public Enterprise Privatization Prevention Act, the Invalidity of Illegal Private Loans Act, and the Interest Rate Restriction Act, are expected to become major agenda items. Meanwhile, the Financial Investment Income Tax Act, which President Yoon and the ruling party promised to abolish, will remain intact, and legislation proposed by the opposition, such as the Online Platform Fairness Act and the Special Act on Jeonse Fraud, is also expected to accelerate.

Politically, more aggressive moves are anticipated regarding impeachment motions against cabinet members or prosecutors and the passage of special prosecutor laws.

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