Yoon stresses fiscal soundness, public livelihood in budget speech

Home > National > Politics

Yoon stresses fiscal soundness, public livelihood in budget speech

Published: 31 Oct. 2023, 17:23 Updated: 31 Oct. 2023, 17:53

SARAH KIM
[email protected]

President Yoon Suk Yeol, left, shakes hand with Democratic Party Chairman Lee Jae-myung before making a parliamentary speech on next year’s budget at the National Assembly in Yeouido, western Seoul, on Tuesday. [JOINT PRESS CORPS]

President Yoon Suk Yeol stressed the importance of fiscal soundness to improve people's livelihoods as he urged lawmakers to pass his government's proposed 657-trillion won ($487 billion) budget for next year in a speech to the National Assembly on Tuesday.

Ahead of the budget speech, Yoon had his first proper sit-down meeting with Lee Jae-myung, chief of the liberal Democratic Party (DP), joined by other parliamentary and government leaders in a rare instance of bipartisan communication.

"Our government's fiscal management policy is sound finances," Yoon said in his second budget speech at the National Assembly in Western Seoul. "We will maintain a sound fiscal stance by setting total expenditures to increase by 2.8 percent in 2024, the lowest level since 2005."

"Sound finance is not simply reducing spending, but using the people's tax money efficiently and without waste," Yoon elaborated. "Fiscal soundness is not only very important for maintaining price stability domestically and national credibility externally, but also to avoid passing on unbearable debts to future generations."

He noted the government saved 23 trillion won by restructuring the spending.

Yoon said that the International Monetary Fund (IMF) recently "praised Korea's sound fiscal policies as heading in the right direction," adding that "international credit rating agencies have also cited fiscal soundness as the most important factor in maintaining our national credit rating."

Yoon said he will prioritize policies aimed at stabilizing prices and public livelihoods.

"We will also strengthen efforts to ease the burden caused by prolonged high interest rates by increasing the money supply to the common people," Yoon said.

Addressing high prices and elevated living costs due to high interest rates, Yoon said, "The government will respond with all-out effort and put the stability of prices and people's livelihoods at the top of all policies."

He said government agencies will work together on a price stabilization system to manage consumer prices while reducing the cost of essential living expenses, such as housing, transportation and telecommunication for vulnerable groups and "thoroughly preparing measures to stabilize people's livelihood" in a tangible way.

President Yoon Suk Yeol gives a budget speech, with parliamentary speaker Kim Jin-pyo looking on, at the National Assembly in Yeouido, western Seoul, on Tuesday. [JOINT PRESS CORP]

Yoon highlighted that the budget would provide an additional 1.5 trillion won in subsidies to 1.23 million households receiving basic welfare, child support to 32,000 people through easing income standards for single-parent families and up to 600,000 won per year to 60,000 children from multicultural families. An 8 percent increase in scholarships for 670,000 low-income college students was also introduced.

The government will further invest 4.4 trillion won in AI, biotechnology, cybersecurity and digital platforms, Yoon said.

Amid controversy over the drastic cuts in the budget for research and development (R&D) for next year, Yoon said, "The national R&D budget should be used to develop basic original technologies and next-generation technological capabilities that are difficult for the private sector to invest in and market."

He said R&D support had been significantly expanded for cutting-edge AI, digital, bio, quantum and space technologies and next-generation nuclear energy.

Yoon asked for parliamentary cooperation in his administration's three major reforms — pension, labor and education.

Regarding labor reform, Yoon said the government will "guarantee legal labor movements, but will respond to illegal activities in accordance with laws and principles."

He said the government has "consistently promoted educational reform that respects diversity and openness and establishes a fair education system."

He also said the government will actively work on pension reform plans "until the National Assembly finalizes it into law through bipartisan discussions."

Democratic Party Chairman Lee Jae-myung, right, greets President Yoon Suk Yeol at the National Assembly in Yeouido, western Seoul on Tuesday. [JOINT PRESS CORPS]

"Global security risks due to the Israel-Hamas armed conflict and the Ukraine-Russia war are increasing instability in the world economy," Yoon said. "The global economic instability and security threats we face now demand national and bipartisan cooperation."

Yoon highlighted that his diplomacy puts the economy at its forefront and that he is ready to "go anywhere in the world where our people and companies are active."

He underscored that "strong security is the cornerstone of the economy," stressing that South Korea is "responding strongly to North Korea's illegal provocations and strengthening deterrence against its nuclear and missile threats."

Yoon said that the South Korea-U.S. alliance, marking its 70th anniversary, has become a "global comprehensive strategic alliance" covering security, economy, advanced technology, information and culture and launched a Nuclear Consultative Group to expand extended deterrence.

On improved bilateral ties with Tokyo, Yoon noted, "Economic cooperation and business between Korea and Japan are now starting to pick up momentum."

He further stressed that through the security and economic cooperation system established at the trilateral summit in Camp David in August, Seoul, Washington and Tokyo have been able to "deepen cutting-edge technological cooperation between the three countries and further strengthen the strategic role of Korea in the Indo-Pacific region and on the global stage."

Regarding relations with Beijing, Yoon said, "Our government will continue mutually beneficial cooperation with China so that the companies and citizens of both countries can enjoy more opportunities and benefits from exchanges."

Yoon pledged to "faithfully use taxpayers' money to more thoroughly guarantee the safety and convenience of the people for essential state functions of the country, such as security, national defense and administrative services."

Democratic Party lawmakers, including floor leader Hong Ihk-pyo, hold a silent rally at the Rotender Hall in the National Assembly in western Seoul as President Yoon Suk Yeol arrives for his budget speech. The opposing political parties agreed to refrain from picketing and booing during a plenary session of the National Assembly, including the president’s speech. [JOINT PRESS CORPS]

When addressing dignitaries in the Assembly, Yoon broke the norm by mentioning DP Chairman Lee's name ahead of the chief of his own People Power Party (PPP), Kim Gi-hyeon.

This is seen as a gesture by the president to put aside political strife to overcome complex economic crises and pass next year's budget promptly.

There were 32 rounds of applause during Yoon's speech. PPP lawmakers responded enthusiastically, while DP members remained more reserved, showing little reaction throughout the address.

The rival parties signed a gentlemen's agreement on Oct. 23 to refrain from carrying pickets or booing during the president's parliamentary address and other political leaders' speeches at a plenary session of the National Assembly. That didn't stop DP lawmakers from holding up signs silently protesting the Yoon administration in halls outside.

From left, President Yoon Suk Yeol chats with National Speaker Kim Jin-pyo, Democratic Party Chairman Lee Jae-myung, People Power Party Chairman Kim Gi-hyeon and Justice Party Chairperson Lee Jeong-mi ahead of a parliamentary speech on next year’s budget at the National Assembly in Yeouido, western Seoul, on Tuesday. [JOINT PRESS CORPS]

Ahead of his budget speech, Yoon took part in a meeting presided over by National Assembly Speaker Kim Jin-pyo, also attended by the DP, PPP and Justice Party heads and floor leaders, as well as the chiefs of the Supreme Court, Constitutional Court, National Election Commission and Board of Audit and Inspection.

Yoon had an opportunity to chat with DP Chairman Lee, who attended this year's parliamentary budget speech after he and his party boycotted it last year. The DP holds a parliamentary majority.

This is the first time that Yoon and the DP leader, rivals in the 2022 presidential election who had been at odds with each other since the launch of the current administration, have properly communicated.

Yoon and DP's Lee have only exchanged brief greetings at government ceremonies and formal events.

During Tuesday morning's meeting at the speaker's office in the National Assembly, Yoon shook hands with the attendees. As he greeted Lee, Yoon said, "It's been a while."

Lee smiled but was not heard responding separately as they shook hands.

In public remarks during the meeting, Yoon said, "The opposing parties and the government all share the same thought. We have many difficult problems to solve, so we ask for cooperation from the National Assembly."

Speaker Kim noted that this is the first time the leaders of the rival parties and chiefs of five government branches have gathered together in one spot. He stressed that "It is time for politicians to make a special determination" to resolve problems regarding people's livelihood.

He noted that the governing party "must sometimes be able to criticize the government that prepared the budget and act as a strong bridge connecting the president and the National Assembly."

Prime Minister Han Duck-soo, who would have taken part in the meeting, was unable to attend due to an overseas trip.

"The president spoke on people's livelihood, and Chairman Lee also said that the people's livelihood is very difficult, so we should listen to a lot of voices on the field and prepare measures," Hong Ihk-pyo, the DP floor leader, told reporters after the meeting.

The legal deadline for the National Assembly to pass the budget bill is Dec. 2.

The budget bill for 2023 was approved on Dec. 24 last year, 22 days after the deadline.

President Yoon Suk Yeol, center, speaks at a luncheon with bipartisan floor leaders and parliamentary standing committee chairs hosted by speaker Kim Jin-pyo at the National Assembly in Yeouido, western Seoul on Tuesday. [JOINT PRESS CORPS]

BY SARAH KIM [[email protected]]