Yoon pledges price stability, sound fiscal policies in budget speech

[Photo by Lee Seung-hwan]

South Korean President Yoon Suk Yeol emphasized that the government would prioritize price stability and public welfare across all policies as he spoke at the National Assembly.

In his budget speech on Tuesday, Yoon promised to “operate a cross-government price stability system” primarily focusing on managing the prices of household staples and “reduce the burden of essential living expenses, including housing, transportation, and communication for vulnerable groups.”

He also promised to “strengthen efforts to ease the burden of high-interest rates by expanding microfinance,” while pledging to come up with measures that can have a noticeable impact on people’s well-being amid a global economic downturn and the resultant struggles in the domestic economy.

Yoon stressed that the government would also maintain sound fiscal policies. While highlighting that next year’s budget increase is set to be 2.8 percent, the lowest level since 2005, he said that the government’s stance on fiscal policies is “sound fiscal management,” meaning the government will endeavor to use all taxpayers’ money efficiently, beyond simply reducing expenditures, saying “sound fiscal management is not only important for domestic price stability and maintaining the nation’s creditworthiness externally, but also for preventing future generations from inheriting an unbearable debt burden.”

Financial resources secured through sound fiscal management “will be allocated to strengthening the country’s essential functions, such as defense, the rule of law, education, and healthcare, as well as protecting the vulnerable and securing future growth engines,” pledging that his administration would provide more support for the working class, vulnerable groups, and socially disadvantaged people, particularly during the current economic challenges.

Yoon highlighted specific amounts for vulnerable groups, including an increase in the livelihood assistance payment for a 4-person household to 1,834,000 won ($1,355) from 1,620,000 won, an increase of 213,000 won. “The monthly allowance for self-reliant youth will be increased by 100,000 won, up by 25 percent, and full tuition support will be provided to all young people in basic and upper-tier households.” He also unveiled plans to “provide low-rate loans to small business owners and support up to 5 million won for heating and cooling system installation.” Soldiers will get an increase of 35,000 won in their monthly salary pledged for 2024, “for a monthly salary of 2.05 million won by 2025.”

The president reaffirmed the administration’s commitment to the three major reforms in pensions, labor, and education, saying that “the government has made significant efforts in the three major reforms for the nation’s future and our future generations, with extra efforts for pension reform.” While expressing his determination to pursue labor reform, he praised the recent decision by the nation’s two major labor organizations to disclose their accounting.

He also emphasized the link between the three major reforms and low birth rates, which has been one of the most serious concerns for the nation, saying that in order to “exit the dark tunnel of low birth rates, we need structural reforms across the overall economic and social sectors to give hope to future generations and make sustainable growth in our society possible,” calling for lawmakers’ interest and support for those reforms.

During his speech, Yoon mentioned the words “economy” 23 times, “people” 22 times, “reform” 14 times, “National Assembly” 10 times, “livelihood” 9 times, and “prices” 8 times, in an indication of the administration’s focus areas.