ed Enhancing fiscal health

The ruling and main opposition parties have been trading barbs over whether to adopt the so-called “pay-as-you-go’’ principle since President Park Geun-hye underscored its need earlier this week.

In Wednesday’s fiscal strategy meeting, Park said, “Given that the country faces skyrocketing welfare spending for its rapidly aging society, the pay-as-you-go rule is urgently needed to maintain our fiscal soundness.’’ In response, a spokesman for the opposition New Politics Alliance for Democracy flatly dismissed Park’s remarks, saying the rule will excessively restrict the National Assembly’s legislative authority.

Introducing the rule ― which requires any increase in direct spending prompted by a new law or revision to be offset by other spending cuts ― is impossible if the opposition disapproves of it because of the National Assembly Law that does not allow the majority party to railroad a bill.

But the opposition party is utterly wrong, considering that the state ― like corporations and households ― should make both ends meet to remain healthy. This is all the more so, given that the rule is intended to boost our fiscal health by blocking ill-conceived legislative bills filed by lawmakers that demand huge fiscal outlays without any means of raising funds.

Korea has talked about adopting the rule since 2010, but to no avail, as lawmakers, especially the opposition, have been lukewarm about it, alleging that their legislative power could be limited. But the reality is that the government struggles with tax revenue shortfalls every year and snowballing welfare expenses amid spreading populist moves.

Most problematic is an outpouring of haphazard legislative bills presented by irresponsible lawmakers. Bills filed by the government are obliged to come up with measures to fund legislation under the relevant law, but those by lawmakers are not. Over the past three years of the 19th legislature, lawmakers have filed more than 13,000 bills, which would approach the record figure for the four-year tenure of the 18th Assembly.

When it comes to budgetary spending cuts, the United States is a case in point. The world’s largest economy is expected to save $64 billion through 2020 thanks to the pay-as-you-go principle introduced in 2010, according to the Ministry of Strategy and Finance.

Relevant bills on the rule have been stuck in the legislature because lawmakers believe that it will be harder to spend tax money on pork-barrel projects in their constituencies. But this is no time for complacency, taking into account that our national debt has reached 530 trillion won, about one-and-a-half times our annual budget.

What’s more worrisome is that politicians will rush to come out with sugar-coated populist pledges ahead of the parliamentary elections scheduled for next April. The main parties should be in a hurry to adopt the rule to maintain our fiscal soundness.