Ruling Party Calls for "Timely Extra Budget" as Opposition Denounces "Vote-Buying" Over 'Cherry Blossom Supplementary Budget'

As the government has officially announced the so-called 'Cherry Blossom Supplementary Budget (extra budget)', signs are emerging of renewed clashes between the ruling and opposition parties.

Han Byungdo, floor leader of the Democratic Party of Korea, said at the party's Supreme Council meeting held in Ganghwa, Incheon on the morning of the 11th, "With concerns growing that the Middle East crisis may be prolonged and the possibility of a global economic recession being raised, it is imperative to promptly stabilize the livelihoods of ordinary citizens and support small business owners and marginal companies. To achieve this, a supplementary budget must be formulated in a timely manner."

President Lee Jae-myung is speaking at the Cabinet meeting held at the Blue House on the 10th. Photo by Yonhap News.

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The opposition party, on the other hand, has criticized the attempt to pass the extra budget as a 'vote-buying' tactic ahead of the local elections. Park Sunghoon, senior spokesperson for the People Power Party, issued a statement on the same day, saying, "This time, the Lee Jaemyung administration is using the distant instability in the Middle East as an excuse to bring out its signature supplementary budget card." He added, "This is an explicit declaration of a 'cherry blossom vote-buying supplementary budget' intended to distribute taxpayers' money ahead of the local elections, and is a classic example of a fiscal policy aimed at swaying voters."

Regarding the size of the supplementary budget, the government has so far drawn a line at issuing deficit-financing government bonds. Koo Yooncheol, Deputy Prime Minister for Economic Affairs and Minister of Economy and Finance, stated the previous day, "The supplementary budget can be implemented without issuing government bonds if it is kept at an appropriate size." Lee Sangmin, senior research fellow at the Korea Institute of Public Finance, said, "While corporate tax revenues are expected to increase due to the semiconductor boom and higher tax rates, the increase may be limited." He further explained, "Because of the expansion of corporate tax credits introduced by the previous administration, deferred tax assets are rising. As a result, the positive effects of the semiconductor boom and tax rate hikes may not be fully reflected in tax revenues."

Meanwhile, at the National Assembly's Planning and Finance Committee meeting held that morning, the recent surge in oil prices was discussed. Cha Kyugeun, a lawmaker from the Innovation Party for the Fatherland, referring to the 'inter-ministerial oil market inspection task force,' said, "If the National Tax Service confirms evidence of collusion, it should report it to the Fair Trade Commission. Likewise, if the Fair Trade Commission learns of any illegal fuel distribution such as tax evasion, it should inform the National Tax Service so that appropriate action can be taken." Park Sunghoon, a lawmaker from the People Power Party, stressed, "There is an urgent need to establish a comprehensive manual for the entire process of seizing, storing, and selling virtual assets."

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