President Lee to Preside Over Cabinet Meeting on June 19
Plans to Submit and Approve 20 Trillion Won Supplementary Budget
On the afternoon of June 19, President Lee Jae Myung will convene a Cabinet meeting to submit and approve a second supplementary budget bill totaling 20 trillion won. Although many had expected the supplementary budget proposal to be submitted in the last week of June, the schedule was moved up after President Lee called for a "swift formulation" of the budget.
Once President Lee and the Cabinet members approve the 20 trillion won supplementary budget, which includes support payments for livelihood recovery, consumption coupons, and a debt relief policy for small business owners, the bill will be sent to the National Assembly. If it passes through the National Assembly's Special Committee on Budget and Accounts and is approved in the plenary session, execution of the supplementary budget will begin.
Initially, within the government, the prevailing view was that the Cabinet meeting on the supplementary budget would only be held after June 27, once all multilateral diplomatic events had concluded. Regular Cabinet meetings are typically held on Tuesdays or Fridays, but in the third week of June, the G7 Summit made it difficult to schedule. Although President Lee's attendance has not yet been confirmed, the NATO Summit scheduled for June 24-25 also overlaps with the Cabinet meeting schedule.
The accelerated supplementary budget schedule reflects President Lee's determination. At the second Emergency Economic Task Force meeting held at the presidential office in Yongsan on June 9, President Lee reportedly instructed each ministry to "formulate the supplementary budget swiftly to promote economic recovery and boost consumption." It has also been reported that he repeatedly emphasized "speed" during closed-door meetings.
The "race for a swift supplementary budget" is closely related to growing concerns about an economic downturn. South Korea recorded negative growth of -0.2% in the first quarter. There are also bleak forecasts that this year's annual growth rate will remain in the 0% range. In order to quickly inject fiscal stimulus and revive the economy, it has become necessary to expedite the supplementary budget process as much as possible.
It is also explained that the ruling party's demand to "pass the supplementary budget within June" may have influenced the decision. A high-ranking government official told Asia Economy earlier this month that "it will not be easy for the supplementary budget to pass within June," but in a call on June 19, the official explained, "The goal is now to have it passed by the National Assembly in June."
To clear the June National Assembly hurdle, the review and vote on the supplementary budget must be completed within 11 days. Since the ruling Democratic Party holds a majority of seats, it is not physically impossible. On June 11, Kim Byungki, then a candidate for floor leader, also stated on Facebook, "What is needed now is not words but action," adding, "During the Moon Jae In administration, the fastest supplementary budget passed in 12 days. We will not let it take longer than that."
However, if it takes time to incorporate additional demands from the ruling party, there are expectations that the supplementary budget may pass next month. At a party-government consultation on June 17, the ruling party conveyed the opinion that residents in non-Seoul and non-capital regions should be given preferential treatment. The government agreed to this, but due to a lack of time to revise the supplementary budget proposal, it decided to reflect these changes during the upcoming budget review process in the National Assembly.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
