"Record Largest Scale"... Party and Government to Handle 3rd Supplementary Budget Bill at June Extraordinary National Assembly Session

[Image source=Yonhap News]

[Asia Economy Reporter Wondara] The Democratic Party of Korea and the government have decided to prepare the third supplementary budget (supplementary budget) at the largest scale ever. Previously, the largest supplementary budget was the 28.4 trillion won supplementary budget prepared in 2009 after the global financial crisis. Through the third supplementary budget, the party and government plan to additionally issue 5 trillion won worth of Onnuri and Jiyuksarang gift certificates and provide 10 trillion won in emergency support funds for small business owners. The budget also includes social overhead capital (SOC) projects such as maintenance of aging railroads and rivers, and installation of 41,000 public Wi-Fi spots.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said at the '2020 Second Half Economic Policy Direction and 3rd Supplementary Budget Party-Government Meeting' held at the National Assembly on the morning of the 1st, "The third supplementary budget will be the largest single-scale supplementary budget in history." He added, "We will submit the supplementary budget to the National Assembly on the 4th. We will make thorough preparations so that 75% can be executed within three months immediately after the National Assembly's approval." Jo Jung-sik, Policy Committee Chair of the Democratic Party, said regarding the funding plan, "Some will be secured through expenditure restructuring, and the rest will be financed through national debt." He added, "Considering the urgent demand on the ground, it will be handled in the June extraordinary session of the National Assembly."

Kim Tae-nyeon, floor leader of the Democratic Party, also emphasized, "The novel coronavirus infection (COVID-19) is different from the IMF foreign exchange crisis or the 2008 financial crisis," adding, "In uncertain situations, it is better to have enough than to have less. We must send a strong signal to the market to revive the economy with a bold third supplementary budget." However, Jo said in a briefing immediately after the meeting, "(The specific scale) will be outlined later when the government submits the supplementary budget to the Cabinet meeting."

Regarding the composition of the supplementary budget, Jo said, "To provide 10 trillion won in emergency support funds for small business owners, we will expand the contribution to the Korea Credit Guarantee Fund and seek additional finances to secure liquidity of 30.7 trillion won for bond and securities stabilization funds for companies in aviation, shipping, and refining industries." He added, "To revitalize the regional economy, we will offer a 10% discount on Onnuri and Jiyuksarang gift certificates and additionally issue 2 trillion won and 3 trillion won worth, respectively."

The installation of public Wi-Fi, which was the Democratic Party's first election pledge, was also included. Jo said, "To reduce communication costs, we will gradually install public Wi-Fi in 41,000 public places nationwide by 2022, and build high-speed internet networks in 650 villages in remote and fishing areas without internet access, as well as establish intelligent networks on major arterial roads." Regarding the Green New Deal, he said, "We will promote a pilot project to convert all kindergartens, elementary, and middle schools into Green Smart Schools," adding, "By 2022, we will reinforce high-efficiency insulation materials and ventilation systems in aging public buildings and convert 122,000 diesel freight vehicles and 28,000 children's school vehicles to eco-friendly vehicles." He continued, "In addition, we will focus investments on improving safety nets for aging tunnels, railroads, railroad crossings, and river SOCs that require safety reinforcement."

Meanwhile, President Moon Jae-in will preside over the 6th Emergency Economic Meeting at the Blue House at 2 p.m. that day. Since the 5th Emergency Economic Meeting (April 22), Deputy Prime Minister Hong has been overseeing follow-up tasks at the Central Disaster and Safety Countermeasures Headquarters, and after about 40 days, he has taken the helm again. President Moon is expected to urge the National Assembly for prompt convening and processing of the third supplementary budget, along with the speedy implementation of economic policies for the second half of the year to revitalize the sluggish economy.