NABO holds Grand Debate on the 2020 Budget Proposal to seek for the principles and directions of budget examination process
October 28, 2019
The National Assembly Budget Office (Chief Lee Jong-hoo), along with the Economy and Finance Research Forum of the National Assembly (Co-president Kim Kwang-lim, Chang Byoung-wan), held the Grand Debate on the 2020 Budget Proposal on October 28th 3 pm at the Member’s Office Conference Hall to seek for proper principles and direction of the examination process of the government budget proposal by the National Assembly.
The opening ceremony consisted of opening remarks by Lee Jong-hoo, Chief of NABO, words of encouragement by Moon Hee-sang, Speaker of the National Assembly, and congratulatory address by Kim Jae-won, Chairman of the Special Committee on Budget and Accounts, as well as by Chang Byoung-Wan, President of the Economy and Finance Research Forum. Professor Shin Yul of Myungji University hosted the debate.
Ahn Il-hwan, Director General of the Budget Office at the Ministry of Economy and Finance delivered a key presentation for the first topic, elaborating that the budget has been formulated to the extent possible to bear internal and external economic conditions, revenue conditions and expenditure demand to accelerate innovation growth, enhance economic vitality, and solidify the foundation of an inclusive state.
The key presentation of the second topic was given by Kim Il-kwon, Assistant Chief for Budget Analysis at NABO, explaining that fiscal soundness should be evaluated in consideration of the rate of increase in national debt, demographic structure, and economic structure overall. He also emphasized the role of government finance and harmonization of fiscal soundness are important for ensuring sustainable finance.
Jeon Hae-Cheol, executive member of the Democratic Party of the Special Committee on Budget and Accounts emphasized that expansionary budget is a requirement, not an option in the midst of the economic crisis of growing uncertainty and volatility in the global economy, sluggish investment and exports.
Lee Jong-bae, executive member of Liberty Korea Party recognized the necessity of a livelihood support budget to improve the quality of life for the ordinary people, solve the unemployment of the youth, reduce bi-polarization, and enhance growth potential. However, he also emphasized that it is expected to deteriorate the fiscal soundness due to significant deficit in consolidated central government balance resulting from reduced revenue and increased expenditure. Thus, he expressed his position to examine the appropriateness of the expansionary budget focusing on fiscal soundness.
Ji Sang-wuk, executive member of Bareunmirae Party agrees on the expansionary fiscal policy but he insisted that the budget must be appropriately used in consumption, investment, export and etc., to trigger the trickle-down effect.
Lee Jeong-mi, the committee member of Justice Party asserted that expansionary fiscal policy is essential during the economic downturn and diagnosed that in addition to fiscal soundness, economic soundness which would reduce future expenditures through timely fiscal input, is as well important Kim Jung-hoon, the President of Fiscal Policy Institute insisted that spending for welfare, job and the youth is required and the burden on national debt is lessened, due to higher level of optimal debt ratio from low interest rate. Professor Kim Ki-heung of Kyonggi University emphasized that discussions on optimal volume of national debt is necessary in the budget evaluation process. He noted that the effect of fiscal expansion may not appear immediately in a situation where the global economy is stagnant, and said that it is necessary to take a closer look at cash assistance and jobs for welfare.
NABO will deliver the results of the Grand Debate on the 2020 Budget Proposal to the Standing Committee, the Special Committee on Budget and Accounts of the National Assembly, the Assemblyman Office, and the Ministry of Economy and Finance for the budget evaluation by the National Assembly.