[Full Text] Yoon: "Four Major Reforms, a Matter of Life and Death"... Absence from Policy Speech

First Sitting President Absence in 11 Years... Korean Prime Minister Reads Speech

President Yoon Suk-yeol stated, "The four major reforms in pensions, labor, education, and healthcare are urgent and critical tasks that must be undertaken immediately for the survival of the nation," adding, "No matter the difficulties, we will definitely accomplish them."

On the 4th, during the plenary session of the National Assembly, President Yoon conveyed this message through a policy speech read by Prime Minister Han Duck-soo, saying, "The government will prioritize people's livelihoods and do its utmost to ensure that the warmth of economic recovery is felt."

Prime Minister Han Duck-soo is reading the policy speech on the 2025 budget proposal and fund management plan on behalf of President Yoon Seok-yeol at the plenary session held at the National Assembly on the 4th. Photo by Kim Hyun-min

From a fiscal perspective, he introduced the establishment of a 'sound fiscal' policy and the government's focus on transforming the economic structure toward private-sector-led growth, highlighting indicators such as the recovery of semiconductor and automobile exports and improvements in employment rates. Regarding diplomatic issues, he evaluated, "We have restored the shaken Korea-US alliance and established a global comprehensive strategic alliance," and "We have restored the broken Korea-Japan relations and opened an era of 'Camp David' cooperation."

He particularly pointed out that the international security situation, along with the illegal military cooperation between North Korea and Russia, poses a significant threat, emphasizing, "We will examine all possibilities, thoroughly prepare countermeasures, and protect our security."

President Yoon also presented 'overcoming the population crisis' as a key task alongside the four major reforms. Following the establishment of the Low Birthrate Senior Secretary Office in the Presidential Office, plans are underway to create a Population Strategy Planning Department as a control tower.

The policy speech is delivered when the government submits the budget proposal to the National Assembly. Since the Park Geun-hye administration in 2013, incumbent presidents have delivered this speech annually; however, President Yoon broke this 11-year tradition by not attending the National Assembly. Given the intense confrontation between ruling and opposition parties over issues such as the phone call between President Yoon and Myung Tae-kyun and the special prosecution law concerning First Lady Kim Geon-hee, with even impeachment being mentioned by the opposition, it appears that he decided not to attend to avoid political strife.

The following is President Yoon Suk-yeol's 2025 Budget Policy Speech

President Yoon Suk-yeol is delivering a policy speech on the 2024 budget proposal and fund operation plan at the National Assembly plenary session in October 2023.

Honorable citizens, Speaker Woo Won-shik, and members of the National Assembly, I am honored to explain the government's budget proposal for the coming year as we face the first budget review of the newly formed 22nd National Assembly. Today, I will discuss the government's policy direction and the progress of policies so far, and based on this, explain the budget proposal for next year.

Since the government took office two and a half years ago, there has not been a single day of peace of mind due to significant difficulties both domestically and internationally. Above all, our economy has faced great challenges due to the global complex crisis.

The war in Ukraine and conflicts in the Middle East have caused disruptions in global supply chains and increases in raw material prices. International high interest rates and inflation, along with financial market uncertainties, have persisted, and economic slowdowns in major countries have led to sluggish exports for us.

This global complex crisis has dealt a severe blow to the livelihoods of our people. At the time the government was launched, inflation soared to over 6%.

Self-employed individuals and small business owners have struggled as much as during the COVID-19 pandemic due to rising prices and interest rate hikes. The government has worked tirelessly for two and a half years to restore the dynamism of our economy and alleviate the hardships of people's livelihoods in the face of these internal and external crises.

We have established a market economy and sound fiscal policy, focusing our efforts on transforming the economic structure toward private-sector-led growth. We have managed national debt stably to maintain national creditworthiness and revitalized the nation's growth engine through bold regulatory reforms.

We normalized the real estate market by easing punitive taxation and restored the collapsed nuclear power ecosystem. Additionally, through comprehensive sales diplomacy, we have expanded the playing field for our companies and extended our economic territory.

As a result, our economy is now moving beyond crisis recovery toward a new leap forward. Exports of key industries such as semiconductors and automobiles have revived, and exports this year are expected to reach an all-time high. The current account surplus is also expected to exceed 70 billion dollars.

Foreign direct investment surpassed 30 billion dollars for the first time in 2022, and in 2023 recorded 32.7 billion dollars, setting a record for the largest investment attraction for two consecutive years. This year, the largest-ever foreign investment attraction is also anticipated. Proud achievements include attracting investments from the Middle East's Big 3, large-scale orders, selection as the preferred bidder for the Czech nuclear power plant, and the largest-ever defense exports.

Thanks to these efforts, our per capita income surpassed Japan for the first time last year, and the international credit rating agency Standard & Poor's forecasts that our per capita GDP will exceed 40,000 dollars by 2026. The decision to include Korea in the World Government Bond Index (WGBI) last October is a clear indicator that our economy is recovering.

Dear citizens, although the economy is reviving, the pace of recovery in people's livelihoods is admittedly below expectations. The government is doing its utmost to ensure that the warmth of economic recovery reaches every corner of people's lives.

To curb inflation, we implemented extraordinary measures, stabilizing the inflation rate from the 2% range to now the 1% range. We have stabilized the housing market to reduce the burden of housing costs.

As a result of continuously promoting policies to enhance corporate dynamism, labor law and order, and protection for vulnerable workers, jobs continue to increase. Last year, the average employment rate for those aged 15 to 64 reached a record high of 69.2%, and the unemployment rate hit a historic low of 2.7%.

To eliminate the Korea discount and support citizens' asset formation, we are actively promoting financial market revitalization policies such as abolishing the financial investment tax and implementing stock market value-up programs.

We are strengthening various financial supports and re-employment support programs to provide practical help to small business owners and self-employed individuals. To ensure that the youth, the future leaders, can study, work, and realize their dreams freely, we are reinforcing the ladder of social mobility, including education and housing.

We are actively expanding welfare for the vulnerable, caring for the elderly and disabled with a national responsibility system more broadly and deeply than any previous government.

We are also making efforts to open a livable local era, the shortcut to livelihood recovery. By introducing the 'Four Major Local Era Special Zones'?Opportunity Development Zones, Education Development Zones, Urban Convergence Zones, and Cultural Zones?we are focusing on attracting large-scale investments, creating quality jobs, and improving living conditions.

The government will continue to prioritize people's livelihoods and do its best to ensure that the warmth of economic recovery is felt.

Citizens, the government has also devoted efforts to opening a new horizon in our diplomacy. Above all, we have restored the shaken Korea-US alliance and established a global comprehensive strategic alliance. Based on the Washington Declaration last April, we have activated the Korea-US integrated extended deterrence system, significantly strengthening nuclear deterrence against North Korea.

We have restored broken Korea-Japan relations and, on this basis, opened a historic era of Korea-US-Japan Camp David cooperation. We have normalized Korea-US joint exercises and established a Korean-style trilateral system to maintain peace through strong power.

Furthermore, since its inception, the government has pursued global pivotal state diplomacy contributing to the world's freedom, peace, and prosperity. Beyond diplomacy on the Korean Peninsula and Northeast Asia, we have expanded the diplomatic horizon to a global level.

Going forward, the government will realize the vision of a global pivotal state based on a strong Korea-US alliance and close Korea-US-Japan triangular cooperation. We will strengthen roles and contributions to bridging gaps between countries and regions in climate crisis, development, and digital sectors.

Recent international security situations and the illegal military cooperation between North Korea and Russia pose a significant threat to our security. We will examine all possibilities and thoroughly prepare countermeasures. I assure the people that we will protect security more firmly and powerfully.

Citizens, continuing the prosperity of the Republic of Korea and opening a sustainable future requires structural reforms in our society above all else.

We are currently facing an unprecedented challenge of low birthrate and aging population. With a declining working-age population and inevitable labor supply reduction, we must increase productivity across society through structural reforms.

The four major reforms currently being pursued by the government?pension reform, labor reform, education reform, and healthcare reform?are urgent and critical tasks that must be undertaken immediately for the survival of the nation.

The government will accomplish these four major reforms regardless of any difficulties. First, we are focusing all efforts on healthcare reform that saves lives and regions. We have prepared four major healthcare reform tasks: expanding medical personnel, strengthening regional healthcare, establishing a safety net for medical accidents, and enhancing fairness in compensation systems.

We will speed up the immediate tasks of 'transforming tertiary hospitals' and 'reforming non-covered and indemnity insurance,' while investing over 30 trillion won over the next five years to support healthcare reform tasks steadily and establish a 'regionally complete essential medical system.'

Pension reform is a significant livelihood issue that greatly affects both current and future generations. The government has faithfully collected public opinions through various methods such as generational meetings and home interviews and presented a unified government pension reform plan last September.

The government plan is the starting point and benchmark for discussions. We hope that the National Assembly will promptly establish a discussion structure, reach social consensus soon, and legislate accordingly.

We will also accelerate labor reform. Since taking office, the government has consistently established labor law and order to improve the labor market structure. Large-scale illegal strikes have disappeared, lost workdays have been reduced to one-third of previous governments, and transparency has been increased through labor union accounting disclosure.

Now, we must accelerate labor system flexibility to expand job opportunities for the people. We will improve the wage system from seniority-based to job and performance-based and allow individuals to freely choose various working styles. Labor reform legislation such as the 'Labor Vulnerable Protection Act' and 'Fair Hiring Act' will also be promoted without delay.

Education reform is also being steadily promoted. The Neulbom School, which has high satisfaction among children and parents, has been expanded to all first graders in elementary schools nationwide from the second semester this year.

Next year, it will be expanded to second graders and gradually to sixth grade, completing the 'public care era' where the state takes responsibility for child care.

We will further accelerate efforts to nurture convergent future talents through AI digital textbooks and the Regional Innovation-centered University Support System (RISE).

Alongside these four major reforms, there is a task that must be resolved: overcoming the population crisis. The government declared a population emergency in June and prepared a 'low birthrate trend reversal plan' focusing on three core agendas desired by youth: work-family balance, childcare, and housing.

To concentrate government capabilities, the Low Birthrate Senior Secretary Office was established in the Presidential Office, and the Population Strategy Planning Department, which will serve as a control tower for responding to the population crisis, is being established.

Fortunately, signs of reversal are appearing. In August, the number of births recorded the highest growth rate in 14 years for the same month, and the number of marriages recorded the highest growth rate for August since statistics began in 1981. The government will devote more effort to ensuring these positive signals become a definite trend reversal.

We will continuously discover and implement effective field-tailored policies, alleviate excessive competition, and open a local era to fundamentally change our social system.

To continue the trend reversal, we must not miss the current golden time. Only when the government, National Assembly, and citizens unite in concerted efforts can we wisely overcome the population crisis. I urge the National Assembly to promptly pass related bills such as the Government Organization Act to enable the swift launch of the Population Strategy Planning Department.

Honorable citizens, Speaker Woo Won-shik, and members of the National Assembly, significant difficulties are expected in fiscal management due to population structure changes caused by aging and uncertainties in the domestic and international environment.

However, prepared challenges can be sufficiently overcome. The government will make every effort to ensure fiscal sustainability in anticipation of expected difficulties.

Sound fiscal policy does not simply mean tightening belts. It means boldly reducing loose parts and unnecessary waste and properly investing in the state's fundamental roles of livelihood recovery and future preparation.

Under an unwavering sound fiscal policy, the government has intensely deliberated efficient fiscal management to prepare the budget proposal for next year. The total expenditure for 2025 is 677 trillion won, a 3.2% increase from this year, and the managed fiscal balance deficit is within the fiscal rules the government is pursuing (minus 2.9% of GDP).

The national debt ratio is controlled at 48.3%, a slight increase of 0.8 percentage points from the previous year. We have re-examined the validity and effectiveness of all fiscal projects and carried out a total expenditure restructuring of 24 trillion won. The resources secured through this will be intensively invested in welfare for the vulnerable and future-oriented investments.

Through next year's budget, the government will focus on supporting four major areas: first, expanding customized welfare for the vulnerable; second, spreading economic vitality; third, improving economic structure for future preparation; and fourth, ensuring a safe society and global pivotal diplomacy.

First, we will continue the trend of expanding welfare for the vulnerable by raising the median income, the standard for all welfare support, by a record 6.4% next year.

Our government has significantly increased livelihood benefits by an average of 8.3% annually. Accordingly, the livelihood benefit for a four-person household will increase by 120,000 won per month next year compared to this year. Over three years, the livelihood benefit has increased by 415,000 won per month.

To assist single-parent families struggling with unpaid child support, we will introduce a 'national advance payment system for child support,' providing 200,000 won per child per month for up to 18 years.

We will support stable old-age life for 10 million seniors by supplying a record 1.1 million jobs. National scholarships will be provided to 1.5 million students, 500,000 more than this year, and a new housing stability scholarship of 200,000 won per month will be introduced for low-income college students studying far from home, enabling our youth to pursue their dreams without financial worries.

We will firmly support housing stability for the lower-income class by supplying a record 252,000 public housing units, including rental and sale housing.

Efforts to boost our economy's vitality will also be more actively pursued. We will strengthen tailored support throughout the business cycle for small business owners struggling with accumulated high interest rates and inflation.

We will extend policy loan repayment periods up to five years and provide annual delivery fee support of 300,000 won to small business owners to ease management burdens.

To help promising small business owners grow into small enterprises, we will newly provide 500 billion won in scale-up funds. The new start fund for small business debt adjustment will be expanded to over 40 trillion won, and step-by-step specialized employment programs covering closure, job preparation, and job search will actively support re-challenges.

Additionally, we will issue the largest-ever Onnuri gift certificates worth 5.5 trillion won to expand the sales base of small business owners. To stabilize farmers' and fishermen's incomes, we will fully introduce income stabilization insurance from next year. By activating online transactions between production areas and consumers, we will stabilize agricultural and fishery product prices and increase farm incomes.

We will also focus on future-oriented investments to secure growth engines for our economy. We will completely reform R&D investment into a leading type and invest a record 29.7 trillion won focusing on three game changers?AI, bio, quantum?and 12 strategic technologies.

We will expand the target for presidential science scholarships and introduce a 'Korean-style stipend' to support stable research environments for young researchers.

Investment in the semiconductor industry, a national strategic industry and security asset, will be further strengthened. We will provide 4.3 trillion won in low-interest loans to create a semiconductor mega cluster and timely expand related infrastructure such as roads and water supply to lead in securing a semiconductor super-gap.

We will establish a 'nuclear power industry growth fund' to restore and advance the nuclear power ecosystem and create a 'K-Defense Export Fund' to boost momentum in defense exports.

We will also strengthen the role of fiscal policy in solving structural problems we face. First, we will completely innovate the fiscal support paradigm to reverse the low birthrate trend.

Moving away from simple cash support, we will focus on supporting the three core areas most needed in actual childcare sites: work-family balance, care, and housing.

We will extend spousal paternity leave to 20 days to allow sufficient time for childcare when needed. Childcare leave benefits will be significantly increased, and a colleague work-sharing support fund will be newly established.

In cases of sudden child illness requiring urgent help, emergency care services will be provided through 65 cooperative-type daycare centers. Additionally, to alleviate housing burdens for newlyweds and childbirth families, the income requirement for newborn special loans will be raised to 250 million won.

Healthcare is an essential national function that protects citizens' safety, like national defense, public security, and disaster prevention. To ensure that our citizens receive quality medical benefits regardless of where they live in Korea, we will strengthen fiscal roles in expanding essential medical services and restoring regional healthcare.

We will concentrate fiscal investment on five major areas: expanding medical personnel, providing essential care, fostering regional healthcare, establishing a safety net for medical accidents, and essential medical R&D to revive regional and essential healthcare and thoroughly prepare for future medical demands.

To this end, the government will significantly expand fiscal support from about 800 billion won this year to 2 trillion won next year and invest a total of 30 trillion won, including 10 trillion won in national funds, over the next five years.

Investment in youth futures will also be increased more boldly. To make young people's dedication a source of pride, starting next year, soldiers' pay will be raised to 2.05 million won per month based on the rank of sergeant.

We will improve various allowances such as junior officer allowances and carefully monitor soldiers' service environments. We will also spare no interest and effort to increase youth employment. The youth 'work experience program' will be expanded, and a three-package system of specialized employment support, job leap incentives, and technical training will be newly established to provide practical help.

Furthermore, the government will systematically support global pivotal state diplomacy to enhance Korea's international standing. The APEC summit will be held in Gyeongju next year. As APEC is held in Korea for the first time in 20 years, we will provide comprehensive support to ensure great outcomes.

We will also expand official development assistance (ODA) to 6.7 trillion won next year. We will strengthen cooperation with key countries with high growth potential such as Africa and Central Asia and contribute to solving global issues through overseas emergency relief and food aid, laying the foundation for realizing global pivotal state diplomacy.

We will strengthen strategic cooperation bases with major countries to enhance our economic security, including supply chain security. We will actively support domestic companies and youth in overseas expansion to further extend our economic territory.

Protection and support for North Korean defectors who risked their lives to find freedom in Korea will also be dramatically strengthened. Settlement support funds for North Korean defectors will be increased by 50%, and education and employment for their children will be carefully supported.

We will make special efforts to raise domestic and international awareness of North Korean human rights, including hosting international conferences on North Korean human rights. We will expand international consensus and support for the vision of a free and unified Korea.

Moreover, the government will create a safe living environment so that citizens can live comfortably anytime and anywhere. We will expand comprehensive flood control projects to prepare for extreme heavy rains and increase the distribution of smart control chargers to prevent electric vehicle battery fires.

We have increased the budget for eradicating drug crimes, which are spreading even among youth, by more than 20% compared to this year. We will strengthen crackdowns and actively support treatment, rehabilitation, and prevention. We will expand advanced detection equipment and strengthen international cooperation to block drug inflows at the source.

We will also further strengthen capabilities to respond to advanced and intelligent crimes such as deepfakes and voice phishing.

Honorable citizens, Speaker Woo Won-shik, and members of the National Assembly, the budget proposal prepared by the government for next year prioritizes support for people's livelihoods and focuses on structural reform and improving the economic structure for future leaps.

I ask that the budget be approved within the legal deadline so that it can be executed promptly and provide help to the people. The government will prepare for flawless execution to deliver warmth to the livelihood sites and do its best to overcome the crises facing our society.

Thank you.