Impulsive supplementary budgetsEvery time the government announces a new spending plan, people become fretful. A fourth supplementary budget passed by the cabinet raises questions of reliability and effectiveness of the spending. The Moon Jae-in administration must act strongly and preemptively against the unprecedented pandemic crisis, which has lasted throughout the year. But its habitual and undisciplined spending can cause serious consequences.
In arguing for a fourth supplementary budget bill of 7.8 trillion won ($6.6 billion), President Moon said, “The spending is necessary to help out the needy with restricted [financial] resources.” However, despite his admittance of financial shortages, the spending plan is overly hefty. The bulk of the money goes to subsidies to every citizen either in gift coupons for children aged under 13, or a blanket exemption of 20,000 won in monthly mobile phone bills for everyone beyond the age of 13. Moon called the phone bill subsidy the government’s show of “comfort and sincerity.”
The comment immediately drew public sneers. “What comfort is it when the money comes out of our own pocket [tax collection]?” was a typical comment. Most of the people refuse the petty allowance to each individual as it could be better spent on flood-hit regions. Merchants and the self-employed, whose businesses were forced to shut down for weeks under tougher social distancing rules, are disgruntled over the vague standards for receiving a maximum of 2 million won. The government has brought upon itself such distrust.
Meanwhile, the government’s wasteful spending is seriously impairing public finances. The four extraordinary budgets amounted to 66.8 trillion won, pushing its national debt-to-GDP ratio to 45 percent. Such spending will only hurt public finances without helping the real economy substantially.
Policymakers must humbly admit that their reckless spending is only elevating the burden on the people. If they go on with heedless spending for political reasons, they are worsening the economy and livelihoods of the people. It is uncertain when the virus crisis will end. Policymakers must stop pouring money into a bottomless pit. The National Assembly must scrutinize the necessity of any new spending bills.