[Campaign Pledge Analysis] Presidential Candidates Offer Rosy Promises... But Where Is the Funding?

Fierce Competition for Votes Amid Plummeting Tax Revenue
Most Candidates Vaguely Promise "Utilizing and Readjusting Funds"
Experts Call for Detailed Cost and Comprehensive Funding Plans for Each Pledge

Presidential candidates have announced their top 10 campaign pledges for the June 3 presidential election, but there are criticisms that their plans for securing funding are insufficient. With the fiscal situation deteriorating under the Yoon Suk-yeol administration, including declining tax revenues, skepticism is growing over the feasibility of these rosy promises.

According to the top 10 campaign pledges of major presidential candidates released by the National Election Commission on May 16, there are virtually no concrete plans for securing the necessary funds. For example, Lee Jae-myung, the Democratic Party candidate, has proposed a wide range of budget-intensive policies, from fostering new industries such as artificial intelligence (AI) to providing child allowances. However, for most of these pledges, the only explanation given for funding sources is that they will be covered by "government fiscal expenditure restructuring and projected annual total revenue increases for 2025 to 2030."

Jin Sung-joon, chairman of the Democratic Party’s Policy Committee, addressed the ambiguity regarding funding sources, stating, "The fiscal situation is extremely difficult, so we have presented broad principles and directions in our design, but the specific implementation plans can only proceed gradually and step by step." He added, "Fiscal estimates have been prepared, but it is difficult to announce them now in the form of a commitment."

Jin further explained, "The amount of funding required will vary depending on how the phased, gradual implementation plan is carried out, so it is not appropriate to announce it at this time. If we take office, we will be able to announce the specifics."

The People Power Party has also failed to present concrete funding plans for its pledges, merely referring to "utilizing existing resources" and "budget readjustment." In contrast, their tax cut pledges, such as lowering the maximum corporate tax rate and introducing a consumer price index-linked comprehensive income tax, are specific.

The Reform Party has also proposed a tax cut plan that would allow local governments to set some corporate tax rates flexibly. While this is somewhat more concrete than the Democratic Party or the People Power Party, it still only amounts to adjusting budget priorities, making it a case of "the pot calling the kettle black."

The core problem is that the fiscal situation is worse than ever before. According to recent government settlement data, the decline in tax revenue under the Yoon Suk-yeol administration has been severe. On a settlement basis, tax revenue was 395.9 trillion won in 2022, boosted by excess tax revenue, but fell to 344.1 trillion won in 2023 and 336.5 trillion won in 2024, showing a year-on-year decline.

In both 2023 and 2024, the government’s initial budgets were 400.5 trillion won and 367.3 trillion won, respectively, so the shortfall between expected and actual tax revenue was also significant. Although the economy has shown slight growth over the past three years, tax revenue has continued to decrease, a paradoxical trend that has persisted for several years.

In this context, the problem is that there is virtually no way to properly scrutinize the rosy blueprints presented by the parties. The current method of requiring funding for each individual pledge is also criticized as irrational. It is argued that, beyond specifying the cost of each pledge, there should also be a comprehensive plan for how the overall budget will be managed to secure the necessary funds.

Lee Sangmin, senior research fellow at the Korea Institute of Public Finance, stated, "The system should be changed so that only the amount of money required for each pledge is specified, and the overall plan for securing funds is presented as a separate item from the top 10 pledges. The current approach only gives presidential candidates a free pass for inadequate funding plans."