The presidential transition committee of President-elect Yoon Suk-yeol put forward 110 national initiatives for the new administration on Tuesday. National interest, practicality, fairness, and commonsense were chosen as the principles to run state affairs. It was estimated that a budget of 209 trillion won would be required to implement the initiatives. It is less than 266 trillion won announced during the election process but is still a massive amount, accounting for one-third of this year’s budget. The committee said they would be financed through restructuring and tax revenue increase from economic growth.
If the budget is used efficiently to boost the economy, its mere size cannot be criticized. However, expenses announced by the transition committee, such as compensation for small business owners’ losses and raises in basic pension and salary for soldiers, will be made to implement the pledges made during the election and are far from improving economic fundamentals or strengthening growth potential. There are currently issues with financing a supplementary budget of 30 trillion won to support small business owners and raising basic pension and salary for soldiers will require trillions of won each year. It is incomprehensible how they will come up with a budget of 41.8 trillion won per year on average while reducing inheritance tax and gross real estate tax.
President-elect Yoon instructed the transition committee to implement small but feasible initiatives first in the beginning. Ahn Cheol-soo, the head of the transition committee, said it is desirable to set and focus on 30 major initiatives to implement them. However, the committee proposed initiatives that are not much different than the Moon Jae-in administration’s 100 initiatives, the Lee Myung-bak administration’s 193 initiatives, or the Park Geun-hye administration’s 140 initiatives.
The former administrations’ lists of initiatives were never properly implemented or held the administrations back when the flexibility and changes of policies were required. In fact, the Moon Jae-in administration pushed ahead with initiatives to raise the minimum wage and introduce the 52-hour-work-week system in the beginning and later faced serious side effects, such as low growth rates, job reduction, and a heavier burden on small business owners.
The government should well manage national finances during a time like this when the world’s economic order quickly changes and unexpected crises arise. It is self-contradictory that the new administration, which intends to introduce binding fiscal rules, is trying to pursue all initiatives that will massively increase the national debt. Low-priority initiatives should be removed in a decisive manner. Putting taxes into grand objectives and initiatives at the beginning of the administration will lead to more burden on people.