Presiding over National Fiscal Strategy Meeting in Sejong
Speeding Up Advanced Technology Development by Abolishing R&D Preliminary Feasibility Study
Reevaluating Fiscal Project Structure to Raise Birth Rate
"Government Finances Like a Young Breadwinner Inheriting Only Debt"
President Yoon Suk-yeol is delivering a keynote speech at the 2024 National Fiscal Strategy Meeting held at the Government Complex Sejong in Sejong Special Self-Governing City on the 17th. [Image source=Yonhap News]
President Yoon Suk-yeol instructed relevant ministries on the 17th to completely abolish the preliminary feasibility study (PFS) for research and development (R&D) projects funded by the national budget. The plan is to significantly increase R&D support to back growth and thereby raise the level of freedom and welfare that the public can feel.
President Yoon also emphasized the need to thoroughly review financial projects related to boosting the birth rate to resolve the national emergency of low birth rates.
On the afternoon of the same day, President Yoon presided over the "2024 National Fiscal Strategy Meeting" at the Government Complex Sejong and made these requests to the relevant ministries. This meeting is held before budget formulation, attended by the Prime Minister, Cabinet members, and key figures from the People Power Party to discuss the future direction of fiscal management.
In his opening remarks, President Yoon asked the attendees, "What is the reason for the government's existence?" and stressed, "The government's primary reason for existence is to enable the people to live happily and comfortably today, and to ensure that the current freedom and prosperity continue into the future."
President Yoon said, "Reflecting on what has been done since my inauguration, I am deeply considering what to change and how to manage the government for the next three years," adding, "I hope today's meeting will be a time to reaffirm our original intentions."
In particular, President Yoon diagnosed, "Although signs of economic recovery are coming from various directions, the difficulties in the people's livelihoods that the public feels continue," and said, "Future fiscal management should focus more carefully on people's livelihoods and prepare for a sustainable future."
He continued, "The government has a mountain of tasks, but resources are limited, so it is difficult to spend money freely," expressing, "When I look at government finances, I sometimes feel frustrated like a young head of household burdened with a lot of debt." However, President Yoon clarified, "The sound fiscal policy I emphasize does not mean cutting spending unconditionally," and added, "It means boldly reducing inefficient parts and properly spending where necessary to improve the efficiency of fiscal expenditure."
Yoon: "Fiscal Role for an Era Centered on the Working Class and Middle Class"
First, President Yoon mentioned at the meeting that the preliminary feasibility study for R&D, the foundation of growth, should be completely abolished and the investment scale significantly expanded. The PFS was introduced in 1999 to pre-verify the policy and economic feasibility of projects involving government funds. It has prevented excessive investment and fiscal waste.
President Yoon's instruction to abolish the R&D PFS is interpreted as an intention to accelerate the development of advanced technology fields. The plan is to raise industrial and national competitiveness through expanded investment in technology development. The government is also expected to select and announce specific project areas exempted from the PFS.
President Yoon said, "Only when the economy grows rapidly can the ladder of social mobility increase and the level of freedom and welfare that the public feels be dramatically raised," adding, "To open an 'era centered on the working class and middle class,' where the working class rises to the middle class and the middle class enjoys a more prosperous life, fiscal policy must play its proper role."
Additionally, President Yoon revealed plans to expand scholarships for students in difficult circumstances and continue increasing basic pensions and livelihood benefits for vulnerable groups such as the elderly. He also emphasized the need to fully support the five major fiscal investments for medical reform.
President Yoon Suk-yeol is delivering closing remarks at the 2024 National Fiscal Strategy Meeting held at the Government Complex Sejong in Sejong Special Self-Governing City on the 17th. [Image source=Yonhap News]
In particular, President Yoon stressed that fiscal resources must be fully committed to overcoming the low birth rate, which is directly linked to the nation's survival.
President Yoon explained, "Despite investing a huge budget of 370 trillion won since 2006, the birth rate has continued to decline," and said, "To effectively raise the birth rate, the structure of fiscal projects must be thoroughly reviewed, and the delivery system and execution methods improved."
However, President Yoon also mentioned the need for sound fiscal management by tightening belts due to limited resources. He emphasized reducing inefficient spending and properly investing where necessary to enhance fiscal management efficiency.
Yoon: "Ministries Have No Choice but to Cut Spending"
President Yoon lamented, "During the past five years of the previous government, the government budget increased by more than 200 trillion won, and as a result, the accumulated debt ratio to annual GDP rose from 36% to 49%," adding, "This has put ministries in a situation where they have no choice but to cut spending." He urged each minister, "When preparing ministry budgets, please clearly distinguish between projects that need to be expanded and those that need to be reduced," and said, "Projects promoted at the national level should be prioritized."
He also said, "We must strive to support tax incentives and regulatory reforms so that companies grow, create more jobs, and the fruits of corporate growth are fairly distributed to the people, while also making greater efforts to create a fair labor market."
President Yoon ordered ministers not to stay at their desks but to actively visit the field, listen to the voices of those in difficulty, and reflect them in policies and budgets. According to a written briefing by Presidential Spokesperson Kim Soo-kyung, President Yoon urged, "Please keep in mind that only by making budget formulation and fiscal management thoroughly field-oriented can the lives of the people improve."
"Incentives Will Be Given Based on Each Ministry's Restructuring Performance"
President Yoon Suk-yeol is presiding over the 2024 National Fiscal Strategy Meeting at the Government Complex Sejong in Sejong Special Self-Governing City on the 17th. [Image source=Yonhap News]
Following this, Choi Sang-mok, Deputy Prime Minister and Minister of Economy and Finance, announced the fiscal management direction for 2024?2028 and the budget formulation direction for 2025. Minister Choi explained that all the budget increase for next year corresponds to mandatory spending, making new increases virtually impossible, and said, "To generously support the government's urgent livelihood tasks, ministries must first undertake budget cuts," adding, "Incentives will be given based on each ministry's restructuring performance." He further stated, "The national debt ratio to GDP during the medium-term plan period will be stably managed at the mid-50% level."
After the Deputy Prime Minister's announcement, participants divided into three sessions?livelihood stabilization, dynamic economy, and fiscal innovation?to present and discuss. Jeong Jeom-sik, chairman of the People Power Party Policy Committee, said, "There are many cases where the government’s national administration details are not well known," and added, "Going forward, the government needs to actively promote in consultation with the party."
Choo Kyung-ho, floor leader of the People Power Party, emphasized, "Given that most of the increased budget next year is mandatory spending, when ministries restructure existing budgets, it is necessary to sufficiently persuade stakeholders in advance to gain their understanding."
Hwang Woo-yeo, emergency committee chairman of the People Power Party, proposed, "First, hold more frequent party-government consultations so that the party and government can develop more policies together and actively inform the public." Regarding the low birth rate issue, Hwang said, "Rather than a top-down approach by the central government, it is necessary to reorganize around local governments."
Prime Minister Han Duck-soo urged ministers, from the perspective of fiscal soundness, to focus resources on essential government tasks when preparing budgets this year and to decisively restructure what needs to be eliminated.
Yoon Urges Ministers to "Take an 'A Mother's Heart' Interest in the Budget"
President Yoon Suk-yeol is presiding over the 2024 National Fiscal Strategy Meeting at the Government Complex Sejong in Sejong Special Self-Governing City on the 17th. [Image source=Yonhap News]
In his closing remarks, President Yoon said regarding policy promotion, "Although the government has explained policies to the public through various channels, from now on, I ask that each ruling party standing committee member and the relevant minister go together to the National Assembly communication office to explain," adding, "I will also go to the briefing room to explain myself."
Regarding the low birth rate issue, he said, "Because there is too much inefficient and wasteful competition in our society, the will to have children is weakened," and added, "When creating policies to improve the low birth rate, efforts to raise social awareness should also be considered."
Furthermore, President Yoon said, "Our mothers saved money from difficult household finances to educate their children more and to prepare something extra when they got married," and added, "I ask each minister to take more interest in the budget with such a mother's heart."
The meeting was attended by Prime Minister Han Duck-soo, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok, Minister of Government Policy Coordination Bang Ki-seon, Fair Trade Commission Chairman Han Ki-jung, Financial Services Commission Chairman Kim Joo-hyun, Vice Chairman of the Low Birthrate and Aging Society Committee Joo Hyung-hwan, as well as People Power Party Emergency Committee Chairman Hwang Woo-yeo, Floor Leader Choo Kyung-ho, and Policy Committee Chairman Jeong Jeom-sik.
The Presidential Office explained, "The matters discussed at this meeting will be actively reflected in the government's budget proposal for next year and the 2024?2028 National Fiscal Management Plan formulation process."
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