Blue House: "Supplementary Budget Possible Without Issuing Government Bonds... Sufficient Support for Necessary Sectors"
Hong Ikpyo: "Energy vouchers are more urgent than lowering the fuel tax"
On the expansion of the U.S. Trade Act Section 301 investigation: "A predictable step"
"Prosecutorial cancellation deal rumors are highly inappropriate... There will li
Hong Ikpyo, Senior Presidential Secretary for Political Affairs, stated on March 13 that while the size of the supplementary budget to respond to the oil price shock from the Middle East has not yet been finalized, the government intends to inject sufficient fiscal resources into necessary sectors. He also expressed the view that the current supplementary budget can be pursued without issuing additional government bonds, given the current revenue outlook.
Appearing on KBS 1TV’s “Sasa Geon Geon” program that day, Secretary Hong said, “The fiscal authorities are actively identifying the necessary expenses for the supplementary budget,” and added, “This time, we are in a situation where it is not necessary to issue government bonds.”
He cited the need to prevent the recent economic recovery, which had been showing signs of improvement, from being derailed by variables in the Middle East as the main reason for the supplementary budget. Based on a recovery in the semiconductor sector, the Korean economy has been on a moderate upward trajectory, with the Bank of Korea forecasting a 2.0% growth rate for this year last month. The Organization for Economic Cooperation and Development (OECD) also projected Korea’s growth rate at 2.1% this year. The presidential office believes that fiscal policy must provide proactive support to prevent this recovery trend from being undermined by the oil price shock.
The supplementary budget is expected to be used in two main areas. One is to support energy-related sectors and companies directly hit by high oil prices, and the other is to stimulate consumption and reinforce the economy. Although Secretary Hong drew a line at media speculation about the size of the budget—such as 10 trillion or 20 trillion won—he made it clear that the government’s policy is to “allocate sufficient and reliable fiscal resources where needed.”
“Energy Vouchers are More Urgent than Fuel Tax Cuts”
Regarding a possible fuel tax cut, he said, “While we are reviewing it, we are still considering it carefully,” and emphasized that targeted support should take priority. He explained that industries such as logistics, public transportation, and sectors linked to gas and electricity rates are directly impacted by the surge in diesel prices. Therefore, instead of a blanket fuel tax reduction, it is more urgent to provide fiscal support first to vulnerable sectors and industrial sites through energy vouchers. The aim is to absorb the pressure for rate hikes through fiscal measures and thereby ease the burden on people’s livelihoods.
Secretary Hong also noted that consumers would feel the effects of the petroleum price cap, which took effect today, relatively soon. The Ministry of Trade, Industry and Energy set the supply price cap for refiners at 1,724 won per liter for regular gasoline, 1,713 won for automotive diesel, and 1,320 won for kerosene, to be applied for two weeks from midnight on the 13th until the 26th. However, this cap applies to the supply price to gas stations and dealerships, not to the retail price at gas stations themselves.
Secretary Hong predicted that, although there would be a time lag as gas stations need to sell off inventories purchased before the price cap took effect, the reduction could be seen as early as the evening of the 13th or from the 14th at some locations, and that, at the latest, stable prices would be reflected within two to three days. In fact, on the first day of the price cap, the nationwide average gas station price for gasoline dropped to the 1,873 won range and diesel to around 1,890 won, marking a downward trend. However, some observers note that it may take more time for consumers to feel the effect in practice, as existing inventories still remain at gas stations.
“Expansion of U.S. Trade Act Section 301 Investigation Was Expected”
Secretary Hong also described the expansion of the U.S. Trade Act Section 301 investigation as “an expected step.” He drew a clear line, saying it should not be linked to any specific company or signal of abnormal U.S.-Korea relations, and explained that not only Korea but also major trading partners such as Japan, Taiwan, and the European Union (EU) were broadly included in the investigation. In fact, on March 12 (local time), the Office of the United States Trade Representative (USTR) announced it had initiated a Section 301 investigation into forced labor imports involving 60 major trading partners, including Korea.
Secretary Hong said, “Our government had already anticipated this possibility and prepared accordingly,” adding, “The export authorities are responding carefully to ensure that neither companies nor the public are harmed.” With the Middle East crisis and U.S. trade pressure occurring simultaneously, the presidential office now faces a complex situation that requires managing price stability, economic defense, and external trade risks all at once.
“Prosecution Withdrawal Deal Rumor is Highly Inappropriate... Likely to Face Broadcast Review”
Secretary Hong also commented on current political issues. Regarding the so-called “prosecution withdrawal deal rumor” that has recently been raised, he said, “It’s so absurd that I don’t even know how to respond,” and, “We are busy, and we don’t have the time to respond to every groundless claim.”
He added, “It’s not even worth responding to,” and said, “However, I believe this is a highly inappropriate fake news story that could undermine public trust in the government and its policies.” He continued, “Since the party has already responded, I expect it will handle the matter well at the party level, and I think there may be a review by the Korea Communications Standards Commission.”
Regarding concerns that the allegations could undermine momentum for prosecution reform, he said, “It is a completely unfounded story with no basis in fact, so I do not think it will undermine momentum for prosecution reform.” He also said, “The presidential office has no intention of planning or responding to any measures targeting specific media organizations,” and emphasized, “It is far more important to gain public trust through policies related to people’s livelihoods, the public, and national development.”
On the disagreements within the Democratic Party regarding prosecution reform bills, he said, “I hope the Democratic Party will handle matters in a manner befitting the ruling party.” Secretary Hong explained, “It is common for opposition parties to disclose information, hold press conferences, and make attacks as part of their struggle against the government, but the ruling party is a pillar of the administration and a partner in running state affairs,” and, “If there are disagreements, they should be coordinated internally and improved for completion.”
He presented the President’s principles for prosecution reform as follows: separation of investigation and indictment, correction of past prosecutorial misconduct, and ensuring that the reform process does not result in investigative shortcomings or harm to the general public. “The consistent position is that the party should cooperate well with the government to produce a reformist yet reasonable alternative,” he explained.
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Meanwhile, when asked about the possible candidacy of former Democratic Research Institute Deputy Director Kim Yong in the June National Assembly by-election, he said, “It’s a matter for the party to decide,” and declined further comment. Regarding National Assembly Speaker Woo Wonshik’s proposal for a one-point constitutional amendment, he said, “It may be difficult to proceed smoothly with constitutional amendment at present, but amending the Constitution is also a long-held view of the President,” adding, “While serious issues such as restructuring the power structure may require further deliberation, I hope that issues on which both parties can agree will be discussed.” He went on to say, “Including the May 18 Gwangju Democratization Movement in the Constitution’s preamble or strengthening requirements for martial law could be pursued even ahead of local elections.”
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