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National budget and debt rose 50% and 61% during Moon’s term

National budget and debt rose 50% and 61% during Moon’s term

Posted December. 06, 2021 07:39,   

Updated December. 06, 2021 07:39


The National Assembly approved the budget plan for next year, which is 607.7 trillion won, 8.9% higher than 2021 and 3.3 trillion won higher than the budget plan submitted by the government. It is the first time that the budget plan exceeded 600 trillion won. Government budget, which started off at 400.5 trillion in President Moon Jae-in’s first year term, rose by 50% in the past five years. Korea’s national debt, even if it does not set up a revised supplementary budget of next year, has increased from 660.2 trillion won to 1,064.4 trillion (61.2% increase of 404.2 trillion won) in five years.

Article 54 of the Constitutional Law that states the National Assembly’s obligation to deliberate and determine national budgets in a way that prevents taxpayer money from going to waste and monitor government spending was severely undermined. Next year’s budget plan included several factors that risked waste such as job expansion plans targeting to create part-time jobs rather than high quality long-term jobs, and Green New Deal business initiatives that lacked efficiency in line with the president’s demands for expanded budgets. The National Assembly went further to extend the budget even more. Their practice of closely examining plans and reducing the budget no longer exists, continuing to expand the budget for two years consecutively.

The process and details of the budget expansion is more troubling. The Democratic Party of Korea tabled the agenda to expand local government-issued cash vouchers from 6 trillion won to 30 trillion won, driven by its presidential candidate Lee Jae-myung, and when talks failed with the opposition party, it pushed ahead on its own to pass the bill. The main opposition People Power Party, which heavily criticized the ruling party’s budgetary expansion as a move to “buy votes,” eventually chose to give up voting when it found out that local SOC budget increased 400 billion won. It compromised on grounds that budgets would be assigned to its local constituencies. At the same time, R&D and national budgets were reduced. The National Assembly appears to turn a blind eye to advanced nations’ movements to increase support on semiconductors, batteries and bio industries and rising tensions in Northeast Asia, simply focusing on impressing the public ahead of the presidential election.

The ruling party claimed that budgetary expansion had been inevitable for COVID response, but the government seeking populism through indiscriminate budgetary expansion has been continuing for some time. When the government continued to increase budgets by 7.2~9.5% every year, the ruling party demanded even more for election budgets. The opposition party failed each time to put these practices to a stop. Both ruling and opposition parties will find it hard to avoid criticism that they have contributed to accumulating national debt that exceeds that of former Lee Myung-bak and Park administrations.