Kim Yong-beom, head of the Cheong Wa Dae Policy Office, commented on the 7th about the potential for a ‘second supplementary budget’ that has been discussed within political circles and the government, saying, “It is too early given the current circumstances.” With talks emerging about further financial support to address the extended conflict in the Middle East, it is seen that the priority will be on implementing the first supplementary budget of 26 trillion South Korean won. Recently, Hong Ik-pyo, senior secretary for political affairs, and others have brought up the possibility of a second supplementary budget.
On the same day, Director Kim conducted a press briefing at the Cheong Wa Dae Chunchugwan Press Center and said, “The second additional budget is an early discussion. The main focus right now is to quickly implement the additional budget of roughly 26 trillion South Korean won that has been prepared.” He further mentioned, “The additional budget was created considering direct effects from the war for about three months and indirect effects like supply chain issues for approximately six months,” and then added, “Since it has been designed to adequately address the situation for three to six months, the circumstances beyond that time frame will be assessed after thoroughly implementing the additional budget.”
Director Kim’s comments took into account recent references to the “possibility of a second additional budget” by the political affairs division at Cheong Wa Dae and the head of the budget office. Earlier, Hong Ik-pyo, Senior Secretary for Political Affairs at Cheong Wa Dae, mentioned in media interviews, “The situation in the Middle East conflict is unclear regarding how long it will continue, and we are cautiously expecting that an extra supplementary budget might be needed in the latter half of the year.” Park Hong-keun, Minister of Planning and Budget, also kept the option open, saying, “If the situation truly extends or if there are additional major impacts, we will assess (the second supplementary budget) while taking fiscal capacity into account.”
Only a week after the initial supplementary budget proposal was submitted to the National Assembly on the 31st of last month, debates over further additions have started within the government and Cheong Wa Dae. The slight variation in position between the Policy Office and the political affairs department seems to be directly linked to the issue of ‘national debt.’ According to Cheong Wa Dae, the first supplementary budget currently being promoted (26.2 trillion Korean won) is a ‘supplementary budget without issuing government bonds,’ using the surplus tax revenue of 25.2 trillion Korean won generated from the semiconductor boom and the strength of the stock market. However, if the second supplementary budget is implemented, the remaining surplus tax revenue will not be enough, ultimately leading to the necessity of issuing deficit bonds.
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