[2023 National Audit] Finance Committee Audit Clash Over Economic Slump: "Dismal Report Card" vs "Excessive Distortion of Facts" (Summary)

"Hey, you're distorting facts and tarnishing the economy"
"There is no score at all on the economic report card"

The ruling and opposition parties clashed over the responsibility for the current economic downturn and tax revenue shortfall during the National Assembly's Planning and Finance Committee audit.

On the 19th, at the Ministry of Economy and Finance audit held at the government Sejong Complex, the opposition party poured criticism on the economic slump.

Hong Young-pyo, a member of the Democratic Party of Korea, said, "When reflecting the economic situation of ordinary people in various economic indicators, the report card is dismal," and criticized, "Looking at the economic report card, it is not just a failing grade, but a government that does not even have a score." Jeong Tae-ho, also from the Democratic Party of Korea, pointed out, "While the International Monetary Fund (IMF) raised the global economic growth rate from 1.3% to 1.5% for advanced countries and from 3.9% to 4% for emerging countries, South Korea’s rate was lowered from 1.5% to 1.4%, indicating a serious situation, but the government seems to lack a sense of crisis," adding, "Especially, incomprehensible policy decisions such as decoupling from China are creating anxiety in the economic sector."

[Image source=Yonhap News]

Hong Sung-guk also said, "Economic policies are proceeding only with small measures without any major ones," and added, "It does not seem to be something that can change the overall game, and responding mainly with events makes it difficult to drive structural changes."

The ruling party rebutted the opposition’s "excessive fault-finding." Park Dae-chul of the People Power Party said, "They are distorting facts and damaging the economy with fake news," and added, "Especially, even former presidents are joining in, using errors in major economic figures." Deputy Prime Minister Choo Kyung-ho said, "The global economy has become very difficult a few months after the launch of the Yoon Seok-yeol administration," and added, "Compared to major advanced countries, we are holding up well, and the expected growth rate for next year (2.2%) is also at a high level compared to other advanced countries." He also said, "China is a very important country, and there is no decoupling from China."

The blame game over the tax revenue shortfall also continued. Earlier, the Ministry of Economy and Finance projected through tax revenue re-estimation that this year’s national tax revenue would fall short by 59 trillion won compared to the initial forecast. Yang Kyung-sook of the Democratic Party of Korea pointed out, "This is a massive tax revenue shortfall comparable to the IMF national default crisis."

Jo Hae-jin of the People Power Party said, "During the previous administration, the unexpectedly collected 174 trillion won in taxes should have been saved either by carrying it over for the future or by contributing to funds," and added, "The debt increased by 400 trillion won during the previous administration, but even considering COVID-19, if it had been kept to a minimum, this situation would not have occurred."

However, Deputy Prime Minister Choo expressed regret over the tax revenue discrepancy, saying, "Regardless, I apologize for the error," and added, "Although there are limitations that made it difficult ex post facto, tax revenue forecasts must be made more accurately," and said, "We consider it our responsibility and are exploring additional improvement measures."

The opposition also focused their questioning on the significant reduction of the R&D budget during the budget formulation process. Ko Yong-jin of the Democratic Party of Korea criticized, "Even during the foreign exchange crisis, which was a national default crisis, the budget was not reduced, but it was cut by a single word from the president," and said, "While the whole world is increasing R&D investment and fiercely competing in technology, this is an embarrassing level." Park Kwang-on, also from the same party, said, "Uniformly cutting the budget by a few percent is not a rational judgment by the government that should properly distinguish the wheat from the chaff."

Deputy Prime Minister Choo responded, "We must invest strategically in challenging areas; dividing the budget and inefficiently executing it without results is not acceptable," and added, "It took 11 years for our science and technology budget to increase from 10 trillion to 20 trillion won, but only 3 years to increase from 20 trillion to 30 trillion won," and said, "It increased too rapidly and excessively. We should have distinguished the wheat from the chaff and increased the budget where necessary, but it was increased extensively across the board."