Hong Nam-ki Reiterates Opposition to Nationwide Disaster Relief Fund: "Taxes Must Be Used Rationally and Efficiently"

Asked about interest rate hikes, "Respecting the independence of the Bank of Korea to the fullest"

Deputy Prime Minister for Economy Hong Nam-ki is delivering opening remarks at the '2021 Second Half Economic Policy Direction Party-Government Meeting' held at the National Assembly on the 25th. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporters Kim Hyun-jung (Sejong), Jang Se-hee] Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki repeatedly expressed opposition to ruling party lawmakers' calls emphasizing the necessity of providing nationwide disaster relief funds through the formulation of a second supplementary budget. Regarding the Bank of Korea's continuous indication of interest rate hikes, he stated, "We fully respect the independence of the monetary authorities," while also mentioning, "It is desirable for various economic policies, including fiscal and monetary policies, to be implemented harmoniously."

On the morning of the 25th, at the National Assembly's Planning and Finance Committee plenary session, Deputy Prime Minister Hong responded to ruling party lawmakers' criticism of the government's opposition to nationwide disaster relief funds by saying, "Last year, the government conducted four supplementary budgets for the first time in 59 years, and this year is pushing for a second supplementary budget. I believe the government has fulfilled its role to the maximum extent possible," and emphasized, "As the minister in charge of finances, I do not hoard the treasury but have been entrusted by the people with the mission to use taxes rationally and efficiently."

When asked by Woo Won-sik, a lawmaker from the Democratic Party of Korea, about the background of the stance not considering nationwide disaster relief funds, he replied, "Considering various economic and fiscal situations, I judge that it is not appropriate to provide disaster relief funds to the highest income and asset groups." When Lawmaker Woo pointed out, referring to the past free school meal case, "It seems like we are revisiting the debate between selective welfare and universal welfare from 10 years ago," Hong countered, "Child welfare and nationwide disaster relief funds are matters of different dimensions."

In response to Lawmaker Jeong Il-young's question about the timing of the supplementary budget, he explained, "The goal is to submit the supplementary budget in early July, and after the National Assembly's approval, it will be executed as quickly as possible." When asked about the target of the disaster relief funds, he answered, "The government should play a fiscal role for the groups that have been more severely affected and damaged," adding, "The scope of government support is broad and not limited to only the affected groups or low-income households."

When asked about his judgment on the Bank of Korea's mention of interest rate hikes, he said, "The monetary authorities speak independently, so it is not appropriate to comment on their interest rate mentions," but added, "However, it is desirable for fiscal policy, monetary policy, and other policies to be implemented harmoniously in economic management." He continued, "We fully respect the Bank of Korea's independence in conducting financial policy," and added, "I will be traveling with the Bank of Korea Governor to the G20 meeting in early July, and there will be opportunities for various consultations around that time."