[Asia Economy Reporters Lee Ji-eun and Park Joon-yi] As the ruling and opposition parties continued their strong confrontation over the 2024 budget bill and the motion to dismiss Minister of the Interior and Safety Lee Sang-min until the last day of the regular National Assembly session on the 9th, it became impossible to pass the budget bill by that day. Ultimately, discussions must continue in a special session. This is the first time since the enactment of the National Assembly Advancement Act (2014) that the budget bill has not been passed within the regular session. Both parties have started to shift responsibility onto each other.
First time since 2014... "Considering physical time, it is practically difficult"
Oh Young-hwan, floor spokesperson for the Democratic Party of Korea, said in front of the Speaker's office on the afternoon of the 9th, "Regarding the 2023 budget bill, it has become practically difficult to prepare a revised bill through additional negotiations between the ruling and opposition parties and reach an agreement within today, considering the physical time," adding, "To pass the budget bill within the regular session, the only way is to process either the government proposal or the (Democratic Party's sole) revised bill."
The "physical time" mentioned by Spokesperson Oh refers to the government's sheet work (adjustment of figures). It usually takes about 10 hours, so even if the ruling and opposition parties reach a dramatic compromise late in the afternoon, considering this time, it is impossible to process the bill within the 9th. Accordingly, the 2024 budget bill has not only missed the legal deadline but also faces difficulty being passed within the regular session. This is the first time since the National Assembly Advancement Act that the budget bill has not been processed within the regular session.
The Democratic Party intends to submit a sole revised bill, but Speaker Kim Jin-pyo stated, "I cannot accept a revised bill. Submit it to the Legislative Affairs Office according to the National Assembly Act procedures," showing that he will not accept it unless it is a bipartisan agreement.
The failure of the ruling and opposition parties to reach an agreement until the last moment stems from their inability to narrow differences over one of the main points of the Yoon Seok-yeol administration's tax reform plan, the "corporate tax cut." The floor leaders and policy chiefs of both parties held negotiations with Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho in the morning, but ultimately failed to reach an agreement. During the negotiations, raised voices were exchanged.
Floor Leader Joo said after the talks, "We tried to reach a final agreement on the corporate tax cut, but despite Speaker Kim's mediation proposal (cutting corporate tax but applying a two-year grace period), the Democratic Party firmly opposes lowering the top corporate tax rate," adding, "If this issue is not resolved, passing the budget will be very difficult." Consequently, the plenary session scheduled for 2 p.m. that day was postponed. Deputy Prime Minister Choo, who participated in the ruling-opposition-government talks, said, "The government also did its best by proposing a compromise that it could concede, but the opposition party's stance is firm," and added, "Now it is the National Assembly's time."
Joo Ho-young, floor leader of the People Power Party, is taking off his mask to speak at the floor strategy meeting held at the National Assembly on the 9th. Photo by Yoon Dong-joo doso7@
Ruling and opposition parties shift responsibility... Ruling party: "Rejected for unconvincing reasons" Opposition party: "Lack of responsibility and sincerity"
As it became difficult to pass the budget bill within the day, both parties held press briefings to shift responsibility. Park Hong-geun, floor leader of the Democratic Party, said, "I've been a member of the National Assembly for 11 years, but I've never experienced a day this long," expressing his feelings, "Realistically, the goal of passing the budget bill within the regular session today has become difficult to achieve."
Floor Leader Park pointed out that the ruling party's sincerity was not confirmed during the negotiation process. He said, "In the will and attitude to pass the budget bill, the ruling party's responsibility and sincerity should be confirmed, but currently, it is not the case at all," adding, "Moreover, when the ruling party holds a minority, it should first propose its own concession plan and try to find a compromise to persuade the opposition, but such efforts are nowhere to be found, leading to today's situation."
The opposition party also clearly opposed the "corporate tax cut," one of the key issues in the budget discussions. Kim Sung-hwan, policy chief of the Democratic Party, criticized, "(The government and ruling party) say 'corporate tax must be low to attract companies,' but times have changed," adding, "In the era of climate crisis, securing renewable energy is key, yet (the government and ruling party) still argue for corporate tax cuts based on outdated neoliberal logic from the past."
Floor Leader Joo also held a press briefing, saying, "Today, it seems practically impossible to meet the 9th deadline," and blamed the Democratic Party for the deadlock, saying, "The Democratic Party, holding the majority, refuses with unconvincing reasons that 'maintaining a high corporate tax rate is the Democratic Party's identity,' so the tax law is not being passed."
He emphasized the necessity of corporate tax cuts, saying, "Our neighbor Taiwan has a 20% corporate tax rate, but with supply chain restructuring, would capital coming out of China build factories in a country with a 20% corporate tax rate or in Korea with 27.5%?" and "To correct the phenomenon where high corporate tax rates reduce domestic and foreign investment, corporate tax cuts are essential."
He added, "Corporate tax was cut during the DJ and Roh Moo-hyun administrations, but during the Moon Jae-in administration, it was raised by as much as 3%, causing this situation," and said, "If maintaining a high corporate tax rate is the Democratic Party's identity, why did they lower it during the DJ and Roh Moo-hyun administrations? They hold outdated ideology and prejudice against the wealthy that cannot be understood."
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