Vice Minister Gi Jae: "Must Resolve the '3 Major Fiscal Ills'... Last Chance for Fiscal Reform"

[Asia Economy Sejong=Reporter Son Seon-hee] The government has identified 'fiscal omnipotence, fiscal compartmentalization, and fiscal selfishness' as the three major fiscal maladies and has begun establishing fiscal reform tasks to resolve them. It plans to announce 'Fiscal Vision 2050,' which includes reforms of public pensions such as the National Pension and a climate response fiscal system, in the first half of next year.

Choi Sang-dae, Vice Minister of Strategy and Finance, delivered the keynote speech at the 'Fiscal Vision Conference' held on the 25th at the Korea Deposit Insurance Corporation in Jung-gu, Seoul, stating, "Fiscal reform to heal fiscal risks and fiscal maladies, even if started now, will only yield visible results in 20 to 30 years," and added, "We will push forward the establishment of Fiscal Vision 2050 with the determination that the next 5 to 10 years are the last opportunity for fiscal reform." This conference was jointly organized by the Korean Economic Association, the Korean Association for Public Finance and Administration, and the Korea Institute of Public Finance.

Vice Minister Choi expressed concern, saying, "Despite the government's efforts to establish a sound fiscal stance, the national debt is expected to surpass 1,000 trillion won within the year, making the medium- to long-term fiscal management environment difficult," and added, "In particular, the fiscal crisis of social insurance due to demographic changes is becoming visible, and uncertainties such as climate change, supply chain, and food crises are acting as risk factors for our fiscal system." He continued, "Habitual and structural fiscal maladies are restricting effective fiscal management, while public demands for overcoming low growth, polarization, and improving quality of life are steadily increasing."

To resolve these issues, the government is setting four core strategies: ▲ virtuous cycle of growth and welfare ▲ proactive response to social insurance risks ▲ fiscal investment system to prepare for future risks ▲ global fiscal management, and is reviewing detailed implementation tasks. Pension reform, which the Yoon Seok-yeol administration has shown strong will for since its inception, is a representative example. Other tasks include reforming policy finance for small and venture businesses and establishing an efficient resource management system for disaster response. Specific goals for legislating fiscal rules and managing medium- to long-term national debt will also be presented.

Vice Minister Choi said, "Without cooperation from related ministries, collaboration between central and local governments, and the understanding and support of the public, (fiscal reform) will be difficult to succeed," and added, "We will continue to gather opinions from experts and the public."