 |
| Gas meters are seen at a residential district in Seoul, Sunday. Yonhap |
By Yi Whan-woo
Skyrocketing heating costs are putting the government's belt-tightening policy to the test, after the annual budget for 2023 was increased by the lowest margin in six years of just 638.7 trillion won ($510 billion).
The 2023 budget was determined in line with President Yoon Suk Yeol's push to improve the nation's fiscal health, in contrast to the pandemic-era stimulus policies embraced by the former Moon Jae-in administration.
The Yoon administration wants to reduce the fiscal deficit to less than 3 percent of the country's gross domestic product (GDP), from an estimated 5.1 percent in 2022.
Under the circumstances, both the ruling and main opposition parties cite the need to allocate a supplementary budget to provide financial support on heating bills for millions of low-income households.
A supplementary budget was allocated in every first quarter from 2020 to 2022 during Moon's presidency.
The Yoon government, however, has cited Moon's extra expenditures as a reason for the snowballing national debt that is estimated to have surpassed the 1,000 trillion won mark for the first time in 2022.
The supplementary budget from 2020 to 2022 reached a total of 195.5 trillion won.
 |
| Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho speaks during a meeting concerning public organizations at Government Complex Seoul in central Seoul, Monday. Yonhap |
"Taking such circumstances into account, the National Assembly's call concerning a supplementary budget definitely collides with the incumbent government's fiscal policy," a staff member of the Korea Academic Society of Taxation said on condition of anonymity, Monday.
The staff member noted that it would mark the fourth straight year if the Yoon administration allocates a supplementary budget for the first three months of this year.
The monthly bills for gas, a main source of heating, were up 34 percent in December from a year earlier due to a cold spell, according to Statistics Korea.
The Ministry of Economy and Finance plans to double energy vouchers and offer discounts on gas fees for 2.77 million low-income households.
The ministry plans to support energy costs without a supplementary budget. But the main opposition Democratic Party of Korea (DPK) demanded a 7.2 trillion won supplementary budget as well as proposing energy vouchers for all households except for those that fall in the top 20 percent of the income bracket.
Under the DPK's plan, 250,000 won will be offered to households that belong to the lowest 30 percent of the income bracket, 150,000 won to households that fall in the low 30 to 60 percent of the income bracket and 100,000 won to households that fall in the low 60 to 80 percent band.
Ruling People Power Party (PPP) Rep. Cho Kyoung-tae proposed offering cash handouts of 100,000 won for three months to the country's entire 21.44 million households.
The plan would cost 6.43 trillion won, and Cho says it would be "a mere 3.3 percent of the 195.5 trillion won extra budget spent by the former Moon administration over the last three years."
Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho dismissed the idea of allocating a supplementary budget, saying, "The government never agreed with the idea and never considered implementing it."
He noted that it was just a month ago that the National Assembly approved this year's budget.
He also warned against excessive liquidity prompted by additional budget spending, which can worsen inflation, which has been cooling to 5 percent after reaching a 24-year high of 6.3 percent in July 2022.
Meanwhile, the president also told his staff to consider measures to ease the heating cost burden on middle and working-class families.
Senior presidential secretary for press affairs Kim Eun-hye said on Monday that Yoon told his staff "to take all possible measures as heating bills are expected to weigh on the middle and the working classes in February as well amid economic difficulties and an unprecedented cold wave."
A plan to tap into the government's reserves for 100 billion won to subsidize the heating bills of low-income households was passed by the Cabinet on Monday and was immediately approved by the president. It will add to the previously allocated 80 billion won budget.
