Lee Hyo-jin covers the Bank of Korea, the banking industry and broader financial news. Her previous beats include foreign affairs, North Korea and general reporting on Korean society.
Budget minister takes office with $16.7 bil. stimulus at top of agenda
Budget Minister Park Hong-keun speaks with ministry officials during a meeting at Government Complex Sejong on his first day in office, Wednesday. Yonhap
By Lee Hyo-jin
Budget Minister Park Hong-keun took office on Wednesday, immediately confronting the task of assembling a 25 trillion won ($16.7 billion) supplementary budget to cushion the economic fallout from Middle East tensions.
According to the Ministry of Planning and Budget, Park began his term with an online ceremony streamed on YouTube, forgoing an in-person event as officials focus on urgent issues such as the extra budget.
"Amid deepening hardships facing people's livelihoods, we must act swiftly without hesitation," Park said in his inaugural address. "I will promptly draw up and submit a supplementary budget to ease the burden of soaring oil prices."
He also said his ministry would serve as a control tower to strategically allocate resources across government agencies and generate value for the country as a whole.
The planned stimulus package is expected to be submitted to the National Assembly by the end of this month, with passage anticipated at a plenary session on April 10.
It will focus on easing rising fuel and logistics costs, supporting small businesses and farmers, and aiding exporters affected by the Iran crisis, according to government officials.
The government is also weighing more targeted support for low-income households, raising speculation about possible cash assistance for vulnerable people, though details have yet to be finalized.
Fuel prices are on display at a gas station in Seoul, Monday. Yonhap
The supplementary budget will be financed without issuing additional government bonds, relying instead on higher-than-expected tax revenues from corporate, income and securities transaction taxes, officials said.
Beyond the immediate task, the newly appointed budget minister is expected to push ahead with an overhaul of government spending as part of broader efforts to improve fiscal efficiency.
Next year's budget plan is expected to serve as an early test of that agenda.
In guidelines for the 2027 budget, set to be released later this month, the ministry has signaled for aggressive restructuring, including cutting discretionary spending by 15 percent and mandatory spending by 10 percent.
During a parliamentary confirmation hearing on Monday, Park pledged to move away from conventional budget allocation practices, replacing them with a top-down system that distributes resources based on national priorities.
Savings from the restructuring will be allocated toward long-term policy priorities, including artificial intelligence, semiconductors, biotechnology, as well as challenges related to demographic decline, carbon neutrality, inequality and population decline, he said.
"The government will pursue sweeping spending reforms to ensure that not a single won of taxpayer money is wasted," Park said. "At the same time, we will not hesitate to invest where needed in order to protect people's livelihoods and prepare for the future."
The budget ministry was launched in January after budget functions were separated from the Ministry of Economy and Finance.
Park, a four-term lawmaker from the ruling Democratic Party of Korea, assumed office after the National Assembly approved his confirmation with bipartisan support on Tuesday.