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Yoon stresses fiscal soundness at his first parliament speech

Yoon stresses fiscal soundness at his first parliament speech

Posted October. 26, 2022 07:43,   

Updated October. 26, 2022 07:43


President Yoon Suk-yeol delivered a speech at the National Assembly on October 25 outlining the budget plan for next year. It was Yoon’s first speech on the fiscal budget after taking office, but the National Assembly was only half-full, as the main opposition Democratic Party refused to attend on grounds that prosecutors executed a search and seizure on Kim Yong, a close aide to Democratic Party leader Lee Jae-myung. The search and seizure might have been necessary for the investigation, but it is questionable whether it had to be performed a day ahead of the president’s speech. Political conflict between the two parties had also been rife five years earlier at former President Moon Jae-in’s speech at the National Assembly. Still, the People Power Party, the opposition party back then, did not, at least, refuse to attend the occasion.

President Yoon pointed out that the previous administration had increased fiscal deficits by lax fiscal management targeted for political purposes. At the same time, the president also mentioned plans to expand budget plans in almost every area, including support for the socially marginalized, social infrastructure, and national security, making one dubious about whether the government would be tightening the budget. Under former President Moon, the budget had increased by 8.7%, which was quite significant. President Yoon said that the budget plan would be the first to reduce the budget scale year-on-year since 2010, but that was compared to the entire budget, including the supplementary budget, and the new year’s budgets. It would not be a fair comparison with this year’s budget when there is a risk of additional supplementary budget coming from an economic crisis in the coming year.

President Yoon avoided, did not respond, or made excuses when discussing the presidential election budget designed for political purposes. The Democratic Party increased basic pensions for seniors from 300,000 to 400,000 won and expanded the eligible target from 70% to 100%. This raise might deal a heavy blow to the budget, but the president refrained from mentioning specific numbers. Parent pension of 700,000 won per month, which will be offered for the first year after giving birth, has been reflected in the budget plan but was not even mentioned. Yoon argued that increasing soldiers’ salaries from 820,000 won to 1.3 million won was necessary to boost national defense capabilities. However, the increase itself would bring about side effects of difficulty recruiting competitive senior-level military officers unless the increase applied to more senior-level military officers.

Under the National Assembly Advancement Act, the budget plan would be automatically passed on to the plenary session on the next day after November 30, the deadline, if the Democratic Party deliberately delays the examination. Still, the passing of the budget plan relies on the Democratic Party, the majority party. If the Democratic Party delays the passing of the budget, the budget plan may not be passed within the year. President Yoon’s speech does not bode well with only half of the assemblymen present. The government and political parties must work together to prevent an unprecedented situation of devising a provisional budget.