Empty promises without funding: Korea’s presidential election risks fiscal integrity

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Empty promises without funding: Korea’s presidential election risks fiscal integrity

Published: 19 May. 2025, 00:03

Audio report: written by reporters, read by AI

Hong Ki-yong

The author is a professor of business administration at Incheon National University and president of the Korean Taxpayers Union.

As Korea’s presidential election approaches, a familiar pattern emerges. Candidates are once again treating the national budget as their personal checkbook, offering pledges worth hundreds of trillions of won. These include expanded child benefits, mandatory issuance of regional gift certificates, new high-speed rail lines and broader welfare programs. While the promises are grand, they fail to answer the question voters most urgently want addressed: “How will all of this be funded?”

Lee Han-joo (second from left), head of the policy division at the main campaign headquarters for the Democratic Party, speaks during a press briefing on the party’s top 10 policy pledges for the 21st presidential election at the National Assembly in Yeouido, Seoul, on May 12. [YONHAP]

The National Election Commission publishes the top 10 campaign pledges of each candidate, but the existence of institutional mechanisms alone cannot guarantee the integrity of those promises. A review of policy documents submitted by candidates in this 21st presidential election reveals a striking lack of specificity.

Lee Jae-myung of the Democratic Party repeatedly states that each policy will be “covered by restructuring government expenditures and increases in total revenue.” Kim Moon-soo of the People Power Party offers similarly vague assurances, citing “tax reform and deregulation to increase revenue.” Neither candidate provides a roadmap for implementation, a phased funding plan, or concrete financial figures. The pledges are numerous, but the evidence supporting them is shallow. The country now faces the real prospect of fiscal instability driven by unfunded promises.

What is most concerning is that this is not a new problem. Similar criticisms were raised during the presidential elections of 2012, 2017 and 2022. Back then, candidates also made massive financial promises without credible funding sources. At the very least, those campaigns were accompanied by independent estimates of total required funding, often published by media or research institutions. In this election, even that minimal level of transparency is absent.

People Power Party presidential candidate Kim Moon-soo announces his economic platform under the slogan “Resetting the Economy – A New Korea” at the party’s headquarters in Yeouido, Seoul, on May 18. [JOINT PRESS CORPS]

For instance, the Korea Institute for Health and Social Affairs estimated that Lee’s pledge to expand child allowances to all children under 18 — at a rate of 200,000 won ($142.98) per month — would cost an additional 16 trillion won annually. That is eight times the current budget of 2 trillion won allocated for child benefits. Meanwhile, Kim’s proposal to build a nationwide GTX (Great Train Express) network would require tens of trillions of won, given its massive infrastructure scale. Yet neither candidate has provided a credible explanation of how they would secure these funds.

The likely consequence is a deepening structural imbalance in the nation’s finances, one that will inevitably fall on the shoulders of future generations. When President Moon Jae-in took office in 2017, Korea’s national budget stood at 400 trillion won, with 242 trillion in tax revenue and 682 trillion in national debt—equivalent to 40.4 percent of GDP. By 2025, the budget is projected to grow to 673 trillion won and tax revenue to 382 trillion won, while national debt will reach 1,273 trillion won, or 48.1 percent of GDP. In eight years, tax revenue has risen by 140 trillion won, but debt has soared by 591 trillion won. The root cause of this lopsided expansion is unchecked campaign spending and populist promises.

In households, children can legally decline to inherit their parents’ debts. In a nation, future generations have no such choice. As citizens, they are obliged to carry the burden of public debt. This raises not only issues of generational fairness but also the risk of taxpayer resistance and broader social instability. If spending continues to favor short-term consumption over productivity-enhancing investment, Korea’s fiscal sustainability could be irreparably damaged.

Worse still, the current slate of presidential candidates is focusing almost exclusively on fiscal giveaways, largely ignoring the foundational pillars of tax policy and regulatory reform. Instead of devising strategies that would incentivize economic growth through deregulation and tax restructuring, most pledges center on expanding welfare and direct cash support. This is the very definition of a populist bidding war.

Lim Hyo-chang, executive committee chair of the Citizens’ Coalition for Economic Justice, speaks during an interim evaluation of Democratic Party candidate Lee Jae-myung’s campaign pledges for the 21st presidential election at the organization’s office in Jongno District, Seoul, on May 13. [YONHAP]

But a nation’s future does not rest on an endless list of promises. It depends on maintaining fiscal discipline, enhancing productivity in the private sector and strengthening national competitiveness. What the next president must offer is not rhetorical sugar but a well-defined plan to secure funding and ensure that pledges are realistically achievable.

That is the only way to preserve voter choice and uphold democratic accountability. It is also the hallmark of genuine leadership and a minimal responsibility to the country.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.