Irresponsible promises

Political parties and candidates running in the April 7 mayoral by-elections in Seoul and Busan are fiercely vying with populist platforms. They all promise hefty cash handouts without financing means.

Na Kyung-won from the main opposition People Power Party (PPP) bidding for Seoul mayor is pledging cheap public rentals and a maximum 117 million won ($105,691) over nine years to young or newly-wed tenants. Her rival from the ruling Democratic Party (DP), Park Young-sun, is offering apartments at half the market price and 20-million-won interest-free loans to the self-employed and small merchants. Ahn Cheol-soo of the People’s Party is also vying for the Seoul mayoral post and pledging 200,000 won in monthly allowance for seniors taking care of their grandchildren.

In the Busan mayoral race, the DP took the initiative of passing a special act to build a new airport on Gadeok Island. The PPP led by interim leader Kim Chong-in went further. The party proposes to build an airport plus an underwater tunnel to connect Busan and Japan. There is no talk over whether a new airport is really needed or whether one on Gadeok island is feasible.

The DP is speeding up a supplementary budget to dole out relief funds before the by-elections. It proposes to give a check to every household despite opposition from the finance ministry.

All the spending plans lack feasibility. They could turn out to be empty promises due to a lack of funding. Even if they proceed as planned, central and local governments will sit on bigger deficit and debt. The burden will be transferred to the future generations. Even though everyone likes a freebie, they will not wish to lay the burden on their children and grandchildren.

In an address to the parliament on the 2021 budget bill in December, German Chancellor Angela Merkel candidly said that colossal fiscal budgeting was inevitable to fight a Covid-19 crisis and it would have to be paid off from 2023. She alerted the people that budgetary policy will come under huge challenges to meet debt obligations. She frankly addressed the consequences of heavy fiscal spending. But no candidates or parties in Korea or the presidential office talk about the consequences of fiscal profligacy.

After the by-elections, political circles will immediately posture for the presidential election in March next year. Given the generosity to win just one-year mayoral seats, we can imagine how liberal the parties will become in the battlefield leading up to the presidential race. At this rate, national coffers could become empty after several elections.