Rival parties in last-minute talks over 2026 budget bill with legal deadline nearing

Democratic Party of Korea floor leader Rep. Kim Byung-kee, right, and People Power Party floor leader Rep. Song Eon-seog meet for talks at the National Assembly, Monday. Yonhap

Rival political parties on Monday began last-minute negotiations to seek compromises to help the National Assembly pass next year's budget plan, a day before the legal deadline for approving the budget bill.

The ruling Democratic Party of Korea (DPK) and the main opposition People Power Party (PPP) have been at loggerheads over key items in next year's 728 trillion-won budget ($498 billion) proposal, including funding for local gift certificate programs. Other contentious items include policy funds, the presidential office's special activity expenses, and education and other taxes.

A major sticking point is the corporate tax rate. The DPK is pushing to reverse the cuts introduced under the former Yoon Suk Yeol government, while the PPP has expressed opposition to raising the taxes, citing the burden it would place on businesses.

The two parties have also clashed over the PPP's push for a parliamentary probe into the prosecution's decision not to appeal a lower court ruling in a high-profile real estate development project in Seongnam, Gyeonggi Province.

The case centers on allegations that little-known private asset management firms, including Hwacheon Daeyu, were allowed to reap massive profits from the 2015 Daejang-dong development project while President Lee Jae Myung was mayor.

"We will ensure that the first budget of the Lee Jae Myung administration is passed within the deadline," DPK leader Jung Chung-rae said during the party's supreme council meeting earlier in the day.

Meanwhile, the PPP has urged the DPK to scale back what it described as "populist spending," demanding cuts to the 1.15 trillion won earmarked for local gift certificate programs.

At the PPP's supreme council meeting, Rep. Kim Do-eup criticized the DPK's push for a corporate tax hike, saying it would affect all businesses, including small and medium-sized enterprises, at a time when they are already "suffocating" under the triple whammy of high exchange rates, high inflation and high interest rates.

Floor leaders from both parties — DPK floor leader Rep. Kim Byung-kee and his PPP counterpart, Rep. Song Eon-seog — met earlier in the day at the National Assembly in a bid to narrow their differences.

Although the legal deadline for the budget plan's passage is Dec. 2, the National Assembly has frequently failed to meet the deadline in the past due to political wrangling between rival parties.