The National Assembly Budget Office, held the Grand Debate on the 2021 Budget Proposal on Wednesday, October 28th 2pm at the Member’s Office Conference Hall to seek for proper direction of the examination process of the government budget proposal by the National Assembly.
The opening ceremony consisted of words of encouragement by Park Byeongseug, the Speaker of the National Assembly, and a congratulatory address by Kim Jaewon, the Chairman of the Special Committee on Budget and Accounts. The president of the University of Ulsan hosted the debate.
Ahn Dogeol, Director General of the Budget Office at the Ministry of Economy and Finance delivered a key presentation for the first topic. Regarding the budget proposal for 2021, which increased by 8.5% from the previous year, he emphasized, “There is concern about fiscal soundness such as government debt, but we have made efforts to minimize economic damage caused by COVID-19 and secure future growth engines.”
The key presentation of the second topic was given by Kim Il-kwon, Assistant Chief for Budget Analysis at NABO who positively evaluated the government’s direction of the expansionary fiscal management because the active role of national finance is important in a crisis. He added, “To create a virtuous fiscal circle, maximizing the efficiency of the fiscal project is required.”
Park Honggeun, the executive member of the Democratic Party of the National Assembly's Special Committee on Budget and Settlement supported the idea of expansionary fiscal management and insisted that the fiscal response to the economy is necessary even if the country has to bear a temporary debt increase, adding that it is the best way to reduce the burden of future generations.
Choo Kyungho (People Power Party), the Senior Staff Director of the National Assembly's Special Committee on Budget and Settlement agrees that an active fiscal role is required in this particular period, but stressed that expenditure should be made where it is needed. As COVID-19 is expected to continue next year, he insisted that government finance should be spent to support the livelihood of the people struggling with the pandemic. As for the Korean New Deal, he mentioned that the government should prime the pump to help the private sector to develop its own growth engine rather than investing directly.
Lee Eunju (Justice Party), the Staff Director of the National Assembly's Special Committee on Budget and Settlement, emphasized that an expansionary fiscal policy should be implemented to stabilize the livelihood of ordinary citizens and strengthen social safety nets to respond to the COVID-19 crisis, rather than reinforcing fiscal soundness. However, she pointed out that the Korean New Deal policy is mostly comprised of existing projects, and that the total limit of BTL (Build-Transfer-Lease) has significantly been increased, transferring the financial burden to the future.
Director Jeong Changsoo of Narasallim Research Institute agreed that fiscal soundness is also important, but he emphasized that the 2021 budget must be planned taking fiscal sustainability into account. He explained that the role of the Ministry of Economy and Finance, which is the ministry in charge, is important in achieving the fiscal innovation meeting the needs of the new environment, moving away from the existing fiscal management.
Professor Kim Woocheol of the University of Seoul explained that COVID-19 caused a completely different fiscal crisis than that of before and that there are increasing concerns over the prolonged economic downturn. In particular, in a situation where the government debt ratio is expected to increase every year, he emphasized that improving fiscal efficiency is required by coming up with a basic tax policy plan, improving expenditure structure, and establishing new fiscal governance in consideration of changes in the socio-economic environment and the possibility of fiscal management reform.
NABO will deliver the results of the Grand Debate on the 2021 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.