▲ National Assembly Speaker Cho Jeong-sik delivers welcoming remarks at a debate on the 2027 budget bill hosted by the National Assembly Budget Office at the National Assembly Members' Office Building on November 2.
The ruling and opposition parties displayed sharp differences on Monday (November 2) during a debate hosted by the National Assembly Budget Office (NABO), clashing over the stance on reviewing next year's budget proposal, which stands at a record 820 trillion won range.
The ruling Democratic Party of Korea defined the upcoming budget proposal—drawn up by the government at around 820.9 trillion won—as a "safety net for the future," while the main opposition People Power Party criticized it as "populist fiscal expansion."
Representative Jung Tae-ho of the Democratic Party, the ruling party's ranking member on the National Assembly's Special Committee on Budget and Accounts, assessed that "expanding future growth engines and alleviating inequality and polarization are the main directions of next year's fiscal formulation," adding that "(the budget bill) places significant emphasis on securing fiscal soundness despite expansionary fiscal spending."
"Since tax revenues are coming in strongly this year and next year, we could spend heavily or pay off all our debts," Rep. Jung said. "However, should we not create a safety net for situations where the economy slows down and tax revenues decline? We are creating that safety net through the Future Response Fund."
In contrast, Representative Yoo Sang-bum of the People Power Party, the opposition ranking member, pointed out, "Reckless spending expansion that relies on a temporary tax revenue boom threatens fiscal sustainability," adding that "blank-check budgets and fund projects are seriously undermining the National Assembly's constitutional right to deliberate on the budget."
Mentioning the increase in budgets for national policy tasks, Rep. Yoo emphasized, "Projects that were asked to be cut or improved in performance evaluations saw their budgets increase severalfold simply because they were designated as national tasks," stressing that "it is urgent to address inefficient budgets and the panacea mentality toward national tasks that neutralizes performance evaluations."
In particular, the ruling and opposition parties also clashed over the establishment of the Future Response Fund worth approximately 162 trillion won, which is considered a flashpoint in the budget review process.
Rep. Jung argued, "Its necessity has been recognized from the perspective of how to manage temporarily increased financial resources," adding, "It is being evaluated as a very good, effective tool by the International Monetary Fund (IMF), the Organization for Economic Cooperation and Development (OECD), and international rating agencies."
Rep. Yoo countered, "The Future Response Fund is not a reservoir for future generations, but a means to circumvent fiscal control," adding, "We will definitely achieve institutional control by drastically reducing the scope under which the fund can be managed arbitrarily without parliamentary approval from the current 30%."
Regarding the utilization of approximately 104.4 trillion won in surplus funds from the Future Response Fund, Rep. Jung said, "There are claims that nearly 30 trillion won less than expected is going (to local grant taxes). It needs to be reviewed," while Rep. Yoo stated, "We will adjust it so that a significant portion is shifted toward redeeming government bonds."
Experts also voiced differing opinions over the establishment of the Future Response Fund.
Lee Jeong-hyuk, an economics professor at Hongik University, argued, "Aside from philosophical questions about the role and expansion of discretion of the central government, two distinct mechanisms—an investment platform and a fiscal stabilization tool—have been mixed within a single system," adding, "It is reasonable to approach this from the perspective of institutional reform to respond to rapidly changing fiscal conditions."
On the other hand, Kim Dae-jong, a business administration professor at Sejong University, criticized, "The best and most reliable way to help future generations is to leave fewer national debts for our descendants to shoulder," stating, "Such a large increase in fiscal spending and the creation of a new Future (Response) Fund are not the right direction. Rather than setting aside 106 trillion won as a reserve, we should pay off national debt."
In this regard, Lim Myeong-hyeon, director of the Budget Analysis Bureau at NABO, pointed out, "About 58.4% of the project budget (for the Future Response Fund) consists of projects transferred or separated from existing accounting funds, lacking differentiation," and added, "It also includes many rigid expenditures that are expected to steadily rise, such as the basic child allowance."
Meanwhile, National Assembly Speaker Cho Jeong-sik said in his welcoming address, "There is no divide between the ruling and opposition parties when it comes to preparing for the future of the Republic of Korea, improving people's lives, and restoring public livelihoods," adding, "I will do my utmost to support smooth (budget) deliberations and ensure the budget bill is passed within the statutory deadline."
(Photo: Yonhap News)
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