Populism in full swing
With less than two months before the March 9 presidential election, President Moon Jae-in accepted a request from the ruling Democratic Party (DP) to draw up an additional supplementary budget. In a Blue House meeting on Thursday, Moon ordered his aides to find effective ways to help relieve the self-employed and small merchants of their deepening pain from the Covid-19 pandemic. “It is fortunate that our government has the ability to help them more,” he said.
The remarks represent the president’s approval of the DP’s proposal to pass a supplementary budget bill on February 14 — a day before the start of the official campaign in the election — following DP presidential candidate Lee Jae-myung’s earlier demand for a 30 trillion won ($25.3 billion) supplementary budget.
No one would deny the need for extra help for people hard-hit by the prolonged pandemic. But the government already planned to give 5 million won each to 550,000 of them before the Lunar New Year and plans to announce additional giveaways on Friday.
We wonder why the Moon administration and the DP rushed to prepare another supplementary budget in February shortly before the election. The ink on this year’s budget is hardly dry. The regular budget includes a 2 trillion-won compensation package for mom-and-pop-store owners and nearly 4 trillion won in reserves.
The Ministry of Strategy and Finance played a part. After revising its projection of tax revenue for this year several times, the ministry came up with the projection of 60 trillion won in excess revenue this year. We never saw that before. The infamous retreat of Finance Minister Hong Nam-ki in the face of pressures from the Blue House will surely be repeated this time too.
How could the projected excess tax revenue serve as grounds for an additional supplementary budget? Technically, a tax revenue in excess can be used after settling accounts in April. So it means the government plans to issue national bonds again. How can the finance ministry take such an unfathomable approach?
It all points to the ruling camp’s need to win in the election through generous handouts to voters. In fact, the government doled out 14.3 trillion won in disaster relief to all citizens ahead of the parliamentary elections in 2020 and an additional 15 trillion won shortly before the Seoul and Busan mayoral by-elections last year. The government cannot avoid criticism for spending its way to helping its favored candidate. We wonder why the finance ministry bothered to underscore the need to maintain fiscal health in a recent report.