[Column] The Democratic Party's Supplementary Budget Demand and Academia's Warning

"If we continue to neglect past fiscal practices, there is no future for Korean society."

At the special session of the joint economics academic conference hosted by the Korean Economic Association on the 2nd, warnings from academia about our fiscal structure poured out. The main voices emphasized the need for vigilance as pension and welfare expenditures continue to rise due to aging, while national revenue inevitably decreases due to low growth and low birth rates. Jeon Byeongmok, chairman of the National Pension Fiscal Estimation Committee, who gave the first presentation, pointed out, "Expenditures will continue to increase steadily, while revenues will not increase much," adding, "The gap will continue to widen." As the presenters made somewhat strong remarks, the moderator also said, "In the past, during the low-interest-rate society, even among scholars there was an opinion that a slight increase in fiscal debt might be acceptable, but now that view seems to have completely changed."

Several experts who participated in the presentations and discussions proposed their own solutions to the unsustainable fiscal structure of Korea. Kim Woochul, professor of taxation at the University of Seoul, emphasized that fiscal rules should be elevated to a higher law than the National Finance Act to prevent reckless spending, and Chairman Jeon advocated for a comprehensive reform of the social security system. Professor Go Seon of Chung-Ang University’s Department of Economics stated the need to expand national revenue by reconsidering value-added tax exemptions. As economists, their concerns about Korea’s fiscal situation, which seems to be heading toward a dark tunnel, were evident. Professor Han said, "Korea has never experienced a fiscal collapse before, so it does not understand fear," adding, "We need to be vigilant."

But what about the National Assembly? The fiscal rules to maintain minimum fiscal soundness have not passed the parliamentary threshold due to communication failures between the ruling and opposition parties, and the Democratic Party of Korea is even demanding a massive supplementary budget (supplementary budget) citing public utility fee increases. Park Honggeun, floor leader of the Democratic Party, sharply criticized the government’s reluctance toward the supplementary budget, saying, "They are utterly irresponsible." While support for the struggling lower-income class suffering from heating costs and inflation is necessary, the current supplementary budget discussion is too light. In the past, during the high-growth era, tax revenues were abundant, so even if supplementary budgets were formed, there was little burden on the national economy, but now every amount accumulates as debt.

Before the National Assembly says that supplementary budgets should be formed and money distributed due to public suffering, it must also consider the future generations who will suffer from the debt incurred by our generation. Lee Cheolin, professor of economics at Seoul National University, emphasized, "Korea has a structure that responds through supplementary budgets, but this budgetary practice must be broken," adding, "Fiscal issues should be viewed not as a matter of political camps but as whether future generations can bear such high tax rates." Borrowing is easy, but the bill that will come later is frightening. Who is truly irresponsible: those who urge caution in supplementary budgets out of concern for fiscal soundness, or the politicians who call for supplementary budgets every time times get tough?"