DP calls for super-sized budget of 530 trillion won for next year

Aug 14, 2019, 09:11 am

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DP floor leader Lee In-young (center) attends a meeting between the government and the ruling party to discuss next year’s budget proposal at the National Assembly on August 13, 2019./ Source: Yonhap

By AsiaToday reporter Lim Yoo-jin

The ruling Democratic Party (DP) and the government on Tuesday formed a consensus on the need to adopt a more expansionary fiscal plan for next year. The DP called on the government to increase next year’s budget up to 530 trillion won, which would be up nearly 12.9 percent from this year’s budget. It proposed at least 2 trillion won earmarked to respond to Japan’s export regulations.

DP lawmaker Youn Kwan-suk made the remark after a closed-door meeting to discuss next year’s budget proposal at the National Assembly. “The two sides agreed on the need of an expansionary fiscal plan for next year in order to cope with economic conditions and support innovation-led growth,” Youn said.

According to the participants, the ruling party called for a budget of 530 trillion won for next year, considering difficult internal and external conditions. This is nearly 13 percent from this year’s record 469.6 trillion won budget.

However, the Ministry of Strategy and Finance was reportedly opposed to the demand for a 530 trillion won increase considering the budget increase rate of less than 9.5 percent from the year before. “The only thing that the government wanted was to keep a balanced budget. But many pointed out that the government should adopt a more expansionary fiscal plan when the economic situation is in bad shape even if it causes a financial loss,” one of the participants said.

The ruling party also insisted to increase the budget to cope with Japan’s export curbs. “The two sides agreed to set aside more than one trillion won in next year’s budget,” Youn said. “In regards to Japan’s trade restrictions, budget spending for the parts and materials industries are included in the supplementary budget. The two sides agreed to identify industrial areas in need of support and to aggressively reflect them in next year’s budget.”

During the meeting, some participants called for an increase in the initial budget to enhance the competitiveness of core parts, materials and equipment. Some even proposed to set aside more than two trillion one in next year’s budget. However, the ruling party said, “No specific budget has been decided or discussed.”

Regarding the R&D budget, the DP believes the government needs to increase next year’s budget and that the management system should be improved to become more efficient. “We decided to hold another meeting between the government and the ruling party after the government ministries discuss the budget presented by the standing committee secretaries,” Youn said. “Today’s meeting was rather a briefing session on the government’s overall budget allocation plan and its key contents,” he added.

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