Yoon urges fiscal prudence in parliamentary budget speech

President Yoon Suk Yeol delivers a budget proposal speech at the National Assembly in Yeouido, Seoul, Tuesday. Joint Press Corps

By Nam Hyun-woo

• Published Oct 31, 2023 4:45 PM KST
• Updated Nov 1, 2023 11:38 AM KST

President Yoon Suk Yeol emphasized fiscal prudence in his budget proposal speech at the National Assembly, Tuesday, as he presented his 2024 budget representing a 2.8 percent increase from this year, the slowest growth since 2005.

Before the budget speech, Yoon met Rep. Lee Jae-myung, chairman of the main opposition Democratic Party of Korea (DPK), his first official talk with the main opposition party leader in his 18-month presidency. The two reportedly shared opinions on controlling prices and stabilizing the people's livelihoods.

"Fiscal prudence is crucial not only for domestic price stability but also for maintaining the country's national credibility externally," Yoon said. "And most importantly, it is for preventing future generations from inheriting unaffordable debt."

On Sept. 1, the government submitted a budget of 656.9 trillion won ($487 billion) for next year. Yoon said this is up 2.8 percent from this year's spending plan, and the lowest year-on-year increase since 2005.

"We conducted a comprehensive assessment of all fiscal projects from the beginning," Yoon said. "We meticulously identified and cut expenses that did not align with their intended purpose, as well as any cases of unnecessary, excessive or improper spending."

He said that the number is an outcome of cutting spending worth 23 trillion won, which will be used for basic state functions such as national defense, rule of law and education, as well as helping the vulnerable.

The president spent the majority of his speech on explaining individual areas where the budget will be spent, focusing on increased welfare benefits for the vulnerable as the current economic difficulties weigh especially heavily on them.

In terms of rule of law and public safety, Yoon said the government will use the budget for improving the police's crime response capabilities, refurbishing river maintenance systems and increasing soldiers' monthly salaries.

He also pledged to expand the budget for official development assistance to 6.5 trillion won, to increase the country's contributions to the global society, and said the government will will invest 4.4 trillion won in artificial intelligence (AI), biotechnology, cybersecurity and digital platforms.

On the other hand, Yoon said the government has cut its budget for research and development projects by 3.4 trillion won, citing "calls for qualitative improvements and restructuring."

"The recent rising oil prices, high interest rates and high consumer prices are adding more difficulties to the public livelihood," Yoon said. "I ask for the National Assembly's interest and cooperation in implementing this budget so that the government can alleviate the public difficulties... The global economic uncertainties and security threats that we are facing call for national and bipartisan unity."

The speech was interpreted as the president making a low-key approach to his opposition rival.

During Tuesday's speech, DPK Chairman Lee was the first party head mentioned by Yoon, who stressed bipartisanship and cooperation in pursuing government projects.

This was comparable to Yoon's budget speech last year, in which he showed indifferrence to the opposition, which had boycotted the speech.

Before the speech, Yoon met with National Assembly Speaker Kim Jin-pyo, heads of rival parties and other government dignitaries, marking the first case in Yoon's presidency of official communication with the DPK chairman.

Yoon and Lee are former rivals in last year's presidential election and have since been foes to each other. While the Yoon administration has refused to communicate with Lee, the DPK has opposed almost every policy pushed by Yoon.

During the meeting, Yoon and Lee exchanged greetings and shook hands. Yoon said, "It's been a long time," and Lee responded with smile.

"Rival parties and the government share the same goal of addressing public economic challenges promptly," Yoon said.

"I ask for the cooperation of the National Assembly, and we (the government) will heed the opinions of the people and explain our budget sincerely to the National Assembly."

More details about the conversation between Yoon and Lee were not revealed to the media. However, according to DPK floor leader Rep. Hong Ihk-pyo, Yoon told Lee about "the difficulties of the public economy," and Lee said "the public's livelihood is challenging, and the government should listen to the people's concerns and implement necessary measures."

The encounter marked a pivotal moment for cooperation between the government and the main opposition party, which holds the majority of seats in the Assembly. However, an immediate breakthrough in resolving the stalemate on key contentious issues between the two sides is believed to be elusive.

While Yoon was entering the National Assembly, members of the DPK held banners in protest against the government. DPK lawmakers also did not applaud during Yoon's speech and only shook hands with the president while being seated or without making eye contact.

DPK floor spokesperson Rep. Yoon Young-deok said, "It was a void speech which was absent of a sense of crisis for the economic difficulties, empathy on the livelihood difficulties of the public and practical solutions to that."