Boost the budgetThe need to formulate a revised supplementary budget is being discussed. The secretary general of the Grand National Party said, “The planned supplementary budget is estimated at 20 trillion won [$13.2 billion] to 30 trillion won, but that’s not enough to fuel economic growth,” implying that the budget may top 30 trillion won.
We believe that the largest possible supplementary budget should be developed as soon as possible.
This year’s budget bill is based on expectations that our economy would grow around 4 percent. Currently, the government has lowered the nation’s economic growth outlook for this year to minus 2 percent, while the International Monetary Fund predicted that our economy may contract 4 percent.
The budget outlay is the only reliable and effective means of surviving this crisis. We have no other choice. More than 20 trillion won is needed to achieve a 1 percent increase in Korea’s economic growth rate. We need to put in at least an additional 40 trillion won in order to bump our negative 2 percent growth to zero.
Our economy is predicted to face even more dire straits during the first half of the year. It is imperative to put the supplementary budget together as soon as we can.
A revised supplementary budget naturally represents an expenditure burden on the government. A 1 percent drop in economic growth leads to a decrease of up to 2 trillion won in tax revenues. If more money goes out and less comes in, we will inevitably suffer a swelling deficit.
However, we are in an emergency situation, and have no time to hesitate just because of concerns about poor revenues. Governments worldwide are poised to roll up their sleeves to tackle the financial problems facing firms and households. The United States, Europe, Japan and China are struggling to maintain employment by expanding spending. The social safety net for people on the margin also must be strengthened.
The supplementary budget draws from precious taxpayer money. The government must strive to offer a detailed account of all the money spent and prevent waste. Recently, some government officials were alleged to have pocketed a huge amount of money set aside for the disabled and the poor. We should prevent a recurrence of such wrongdoing in order to obtain the consensus necessary for the budget to work.
Our survival depends on how drastically we can enlarge the budget and how efficiently we can manage it.