Cheong "Dangjeongcheong, Consensus on 'Active Fiscal Role' Not Only This Year but Also Next Year"

President Moon Jae-in is presiding over the 2020 National Fiscal Strategy Meeting on the 25th at the Blue House to discuss fiscal strategies for the post-COVID-19 era and the fiscal management plan for 2020-2024.
[Image source=Yonhap News]

[Asia Economy Reporter Son Sun-hee] Kang Min-seok, spokesperson for the Blue House, stated on the 25th regarding the '2020 National Fiscal Strategy Meeting' chaired by President Moon Jae-in, "The ruling party, government, and the Blue House reached a consensus through discussions to maintain an active fiscal role not only this year but also next year to overcome the crisis amid an 'unprecedented economic wartime situation.'"

After the meeting, Spokesperson Kang said in a written briefing, "The ruling party, government, and the Blue House agreed on the major direction of preventing further economic decline and driving growth through proactive and preemptive fiscal expansion, thereby expanding the tax base, restoring fiscal soundness, and establishing a virtuous cycle foundation."

Earlier, President Moon emphasized the importance of 'expansionary fiscal policy' repeatedly in his opening remarks to overcome the economic crisis caused by the novel coronavirus disease (COVID-19), and it was explained that the ruling party, government, and Blue House agreed to continue this stance through next year.

However, Spokesperson Kang explained, "After overcoming the COVID-19 crisis, efforts will be strengthened to manage mid- to long-term fiscal soundness by monitoring the economic recovery trend," adding, "We plan to maximize the efficiency of fiscal investment and focus limited resources on the 'Innovative Inclusive Nation' sector." He further added, "Efforts to increase total revenue will also be pursued through strengthened taxation on undeclared income and improved management efficiency of state-owned assets."

The National Fiscal Strategy Meeting held at the Blue House State Guest House on this day lasted about 2 hours and 15 minutes from 2 p.m. Prime Minister Chung Sye-kyun, who received the opportunity for closing remarks from President Moon, conveyed that regarding the preparation of next year's budget, "Next year is truly an important year," and urged, "We must do our utmost to catch two rabbits: how to fully realize the Moon Jae-in administration's national philosophy and how to overcome the COVID-19 crisis."

Prime Minister Chung continued, "When preparing the budget, judgments should be made from the 'people's perspective,' not the ministries' perspectives, and to do so, we must overcome the silos between ministries," adding, "Please consider investing the budget appropriately beyond the boundaries of projects within each ministry to maximize effectiveness." He especially urged the Ministry of Economy and Finance, "Please actively accept and respect efforts when each ministry conducts its own expenditure restructuring."

Meanwhile, in the closed-door discussion following President Moon's opening remarks, Lee Hae-chan, leader of the Democratic Party of Korea, emphasized the 'social pact,' reportedly stating, "Now might be an opportunity to solve structural problems through a social pact." He cited SK Hynix's case during 2001?2005 when it was known as 'Hynix Semiconductor,' where labor-management cooperation helped the company escape court receivership, mentioning, "It was not the government or management that led the restructuring, but the labor union that took the lead in improving productivity and creating a good company."