Opposition Pushes for 'Third Round of Disaster Relief Funds'... Driven by Budget and Election Agenda Strategy

People Power Party Proposes Inclusion in Main Budget,
Expresses Intent to Cut Korean New Deal Funds
Aims to Seize By-Election Agenda Next Year,
Counterattack Against the Gadeokdo Issue
Democratic Party Reluctant, Sees No Political Gain
Concerns Over "Cash Handouts" Criticism,
Expects Ruling Party to Take Initiative with Supplementary Budget

[Image source=Yonhap News]

[Asia Economy, Reporter Kim Hyemin, Reporter Won Dara, Reporter Jeon Jinyoung] As signs of a third wave of COVID-19 infections emerge, calls for a "third round of disaster relief funds" are surfacing in the political arena. The People Power Party, which had previously criticized cash-based support, was the first to bring up the issue. In contrast, the Democratic Party of Korea is expressing reluctance, dismissing the move as a political offensive. In effect, the positions of the two parties have reversed.

On November 24, the People Power Party officially decided to pursue the inclusion of a 3.6 trillion won third round of disaster relief funds in next year's budget bill. This effectively turns the proposal made the previous day by Emergency Committee Chairman Kim Chongin into the party's official stance. Chairman Kim pointed out, "Would it not be embarrassing to pass the main budget on December 2 and then say in January next year that we will provide disaster relief funds through a supplementary budget?" He added, "Since there is not much time left until the budget bill is processed, it is only reasonable to anticipate and prepare in advance."

Within the Democratic Party, Lee Jaemyung, Governor of Gyeonggi Province, has advocated for universal disaster relief payments. The Justice Party has also voiced support for universal disaster relief funds. The People Power Party, however, has placed greater emphasis on targeted payments, stating, "We will provide emergency livelihood support to households in crisis and support industries directly hit by the economic downturn."

[Image source=Yonhap News]

The People Power Party's proactive proposal is based on the explicit reason that raising social distancing measures to Level 2 would severely impact not only the self-employed but also the domestic economy. Since the National Assembly is currently reviewing next year's main budget, the party is suggesting that disaster relief funds should be included now to ensure timely support.

However, the push to include disaster relief funds in the main budget also appears to be motivated by the intention to significantly cut the Korean New Deal budget to secure funding. Choo Kyungho, the People Power Party's secretary on the National Assembly's Special Committee on Budget and Accounts, stated, "We need to allocate more funds to COVID-19 response and livelihood support, and corresponding cuts must come first." Lee Jongbae, the party's Policy Committee Chairman, also made clear his intention to cut, saying, "The government plans to inject 21.3 trillion won of taxpayers' money into the Korean New Deal projects, which are disconnected from people's livelihoods. We will cut all budgets that are populist, wasteful, or merely for show."

On the other hand, the Democratic Party maintains that "now is the time to focus on processing the budget as scheduled during the regular National Assembly session," arguing that it is premature to discuss additional relief funds.

This stance appears to be based on concerns that starting discussions on including a third round of disaster relief funds in the main budget could jeopardize the deadline for passing the budget bill. The Democratic Party has already planned to process the main budget on December 2 and to pass the three major economic bills and the revision of the Corruption Investigation Office for High-ranking Officials (CIO) Act within the regular session. A Democratic Party official said, "We have submitted the budget to the National Assembly without considering the third round of disaster relief funds, and incorporating it now would create various practical difficulties."

The Democratic Party also believes that the opposition will use the third round of disaster relief funds as a pretext to demand cuts to the Korean New Deal budget. Typically, the National Assembly reviews the budget within a set framework, making both increases and cuts, but if a large-scale increase such as the third round of disaster relief funds is seriously discussed, significant demands for cuts will inevitably follow. If the funding is secured through government bonds, the party could face criticism for "handing out cash." The Democratic Party is also concerned about the potential for renewed conflict with the Ministry of Economy and Finance, which is wary of issuing more government bonds.

[Image source=Yonhap News]

Some analysts suggest that, beyond the power struggle during the budget review process, the parties are also competing to take the lead on key issues ahead of next April's by-elections.

The People Power Party's decision to raise the issue of a third round of disaster relief funds first is seen as a strategy to seize the initiative and dominate the political agenda. It is also viewed as a preemptive move to prevent the ruling party from taking the lead on disaster relief funds by proposing a supplementary budget ahead of the elections. Political commentator Park Sangbyung said, "If the Democratic Party had made the first move, the People Power Party would have been seen as merely reacting, so they decided to act preemptively." Political commentator Lee Jonghoon interpreted the move by saying, "The ruling party's recent focus on the Gadeokdo issue has led to internal strife within the People Power Party, so they needed a counterattack card."

There are also observations that the Democratic Party's passive stance is based on the judgment that there is no political benefit to be gained. With the elections approaching, it is believed that the party will opt to propose a supplementary budget next year, rather than include the funds in the main budget, to maximize the dramatic effect.

Political commentator Park said, "Ultimately, this is a battle for leadership between the ruling and opposition parties, as well as an attempt to win public sentiment ahead of the elections." Political commentator Lee added, "It seems to be a competition to take the lead on key issues ahead of next April's by-elections, but making populist pledges should be avoided. Both parties need to exercise restraint."