The ruling and opposition parties clashed over the second supplementary budget submitted by the Lee Jae-myung government to the National Assembly. They engaged in heated discussions regarding the schedule for the Special Committee on Budget & Accounts and contentious issues such as consumer coupons for economic recovery and the establishment of a bad bank.
The Public Administration and Security Committee of the National Assembly held a plenary meeting on the 30th to discuss the plan for distributing consumer coupons included in the second supplementary budget. The opposition People Power Party acknowledged the necessity of supporting small business owners but opposed plans to distribute the coupons to all citizens.
Park Soo-min, a member of the People Power Party, pointed out, "Do you think that all citizens receiving consumer coupons will choose to spend them on vulnerable small business owners and self-employed individuals?" He added that, according to materials already analyzed by the Korea Institute of Public Finance regarding the economic impact of the COVID-19 recovery support fund, the effect on consumer spending lasts only about one or two months, and the fiscal multiplier is slightly below 0.2.
Chae Hyun-il, a member of the Democratic Party, emphasized, "Now is the golden time for people's livelihoods and regional economies, and timing and speed are crucial. Japan is also discussing support funds for the people," adding that since the vacation season is from late July to early August, if the supplementary budget passes, it must be executed within two weeks.
The National Policy Committee of the National Assembly continued to engage in disputes over the establishment of a bad bank program by the Korea Asset Management Corporation (KAMCO) for long-term overdue debt. The bad bank would purchase and dispose of personal debts under 50 million won that have been overdue for more than seven years, adjusting the debts. The Democratic Party argues for the introduction of the bad bank, citing that the emergency martial law declared on Dec. 3 has made the economic situation difficult.
Heo Young, a member of the Democratic Party, explained, "It is a policy that provides economic recovery opportunities to individuals who cannot even open accounts or obtain loans," asserting that implementing a debt disposal policy through the supplementary budget is not a giveaway or populist project but a catalyst for stabilizing the financial system.
In contrast, Kang Min-guk, a member of the People Power Party, stated, "Under the same conditions, 3,612,119 people have actually repaid, and the repayment amount alone reaches 1.058181 billion won," and warned, "This could lead to serious financial moral hazard." Another party member, Chugyung-ho, also criticized it as a policy that could undermine equity, sustainability, and fiscal soundness.
During the full meeting of the Special Committee on Budget & Accounts held from the morning, the ruling and opposition parties collided over the examination schedule. The People Power Party protested by walking out collectively, claiming that the Democratic Party decided to conduct the comprehensive policy inquiry in one day without prior consultation. However, the situation was resolved when both parties agreed to carry out the comprehensive policy inquiry over two days until the 1st of next month.