Supplementary Budget Formulation: Ruling, Opposition, and Government Remain Divided [Why&Next]

Choi Sangmok, Acting President and Deputy Prime Minister as well as Minister of Economy and Finance, has stated that he is open to discussions with the National Assembly regarding the formulation of a supplementary budget. The Democratic Party of Korea is showing urgency in advancing these discussions, leaving open the possibility of negotiating the proposed 20 trillion won budget. In contrast, Kwon Seongdong, floor leader of the People Power Party, has publicly expressed dissatisfaction with Bank of Korea Governor Rhee Changyong, who emphasized the need for a supplementary budget, indicating that the gap between the ruling and opposition parties, as well as the government, remains difficult to bridge.

Yonhap News

As of January 23, according to reports from relevant ministries and the National Assembly, discussions on the supplementary budget are not progressing at a rapid pace. At a Cabinet meeting held at the Seoul Government Complex on January 21, Acting President Choi stated, "If the consultative body among the ruling party, opposition party, and government is launched promptly, the National Assembly and the government can jointly discuss the matter under the fundamental fiscal principle that 'the people's precious taxes must be used most effectively.'"

Although Acting President Choi did not explicitly use the term "supplementary budget," his remarks were interpreted as the government being open to discussions in response to recent calls for such a measure. While this year's economic growth rate is expected to remain in the 1% range, the prolonged parliamentary deadlock following the impeachment crisis has stalled discussions on key economic and livelihood-related bills.

Legislation such as the "Special Act on Semiconductors," which would provide direct subsidies to the semiconductor industry, and a tax law amendment to extend the R&D tax credit for new growth, original, and national strategic technologies by five years until the end of 2029, have all come to a halt. By expressing a willingness to discuss a supplementary budget contingent on the launch of the consultative body, Acting President Choi appears to be reflecting the need to use the supplementary budget as leverage to advance economic and livelihood policy discussions. On January 16, Governor Rhee proposed a supplementary budget of 15 to 20 trillion won at a press briefing, stating, "It is a time when fiscal stimulus, in addition to current monetary policy, is needed to boost the economy." He also stressed the need for swift action regarding the supplementary budget.

The People Power Party is drawing a clear line. On January 22, Kwon Seongdong, floor leader of the party, reportedly confronted Governor Rhee during a meeting at the Bank of Korea in Jung-gu, Seoul, regarding Rhee's move to make supplementary budget discussions more concrete. Before the meeting, Kwon stated, "I decided to visit to hear the background behind the governor's remarks." After the meeting, Park Sumin, spokesperson for the People Power Party, said in a briefing, "The governor did not suggest prioritizing the supplementary budget, but rather meant that having a concrete supplementary budget plan would be positive for external credibility. I believe there may have been a misunderstanding that the governor was calling for rapid action on the supplementary budget."

This appears to be due to the complex political calculations surrounding the supplementary budget. An official from the National Assembly commented, "Regardless of party affiliation, lawmakers inevitably recognize the need to increase budget allocations for their own interests. However, there are concerns that proceeding with the supplementary budget at this time could benefit Lee Jaemyung, the Democratic Party leader with the highest approval ratings, which is likely why progress has stalled."

The Democratic Party is actively moving forward with discussions between Acting President Choi and Governor Rhee on the supplementary budget. Within the party, there is a view that if a supplementary budget is indeed realized, there is ample room for negotiation on the initially proposed 20 trillion won scale or the scope of providing 250,000 won in local currency. There is also a willingness to discuss alternatives, such as providing the 250,000 won payment not to all citizens, but only to vulnerable groups and small business owners.

However, a Democratic Party official stated, "Acting President Choi's position that discussions on the supplementary budget can take place only based on bipartisan agreement ultimately aligns with the ruling party, suggesting that the Ministry of Economy and Finance does not intend to proceed with the supplementary budget." The Ministry of Economy and Finance is in a difficult position. For discussions on the supplementary budget to begin, the ministry must first draft a proposal and submit it to the National Assembly. However, even if the ministry recognizes the need for a supplementary budget, it cannot submit a proposal to the National Assembly as long as the ruling party opposes it. A senior official from the ministry said, "There is absolutely no difference of opinion between the ministry and the ruling party, contrary to what some in the media suggest," adding, "It seems that Acting President Choi's message is being overinterpreted."

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