Clashes between the ruling and opposition parties over the compilation of a supplementary budget continued during the interpellation of the government. The Democratic Party of Korea stressed the immediate need for the so-called "war supplementary budget" and urged swift passage, while the People Power Party raised caution, saying execution of the supplementary budget could fuel exchange-rate instability and have side effects such as questions over appropriateness.
At the interpellation of the government held at the National Assembly on the 6th, Oh Ki-hyeong of the Democratic Party of Korea said, "The Organization for Economic Cooperation and Development (OECD) recently said our economic growth rate could fall from the previous 2.1% to around 1.7% this year due to shocks to the energy supply chain," adding, "We need to respond preemptively and boldly."
Minister Park Hong-geun of the Ministry of Planning and Budget responded, "The later the execution, the less effective the supplementary budget becomes."
Oh said, "Some are questioning whether this supplementary budget is for election purposes, and there are also claims that it is a 'supplementary budget using the Middle East war as an excuse,'" adding, "We need to fully explain the contents of the supplementary budget to the public."
Kim Nam-geun of the Democratic Party of Korea emphasized the need for a supplementary budget but drew a line regarding concerns about its impact on prices and the exchange rate. Kim said, "There is criticism that injecting fiscal spending can raise prices and the exchange rate, but that is mainly in overheated economic conditions," adding, "In a downturn, the inflationary impact of fiscal spending is relatively limited."
The need for swift support in the cultural industry was also mentioned. Kim said, "When the economy weakens, cultural consumption such as performances and films is the first to decline," noting, "If we do not respond now, the foundation of the Korean Wave industry could be shaken."
In response, Deputy Prime Minister for the Economy Koo Yun-cheol said, "Artists are key players leading K-culture but are a group vulnerable to external shocks," adding, "This supplementary budget includes support measures to help these vulnerable groups overcome the crisis."
By contrast, the People Power Party continued its criticism, citing the possibility that the exchange rate could rise further due to the compilation of the supplementary budget. Park Soo-young of the People Power Party pointed to Prime Minister Kim Min-seok and said, "With the intraday exchange rate hitting 1,536 won last month, executing a supplementary budget could push the exchange rate higher."
Park went on, "If we again release consumer coupons and proceed with a supplementary budget, there is significant concern that it could be transferred to liquidity (M2) as in July 2025," adding, "Since the start of the Lee Jae-myung administration, a 13% rise in the exchange rate is tantamount to saying that 13% of the people's assets have evaporated."
Kim Seon-gyo of the People Power Party questioned Deputy Prime Minister Koo about the appropriateness of compiling a supplementary budget for the pilot program on basic income for rural and fishing communities. Kim said, "A pilot program that has not even been verified was included in the supplementary budget," adding, "Is this project urgent enough to be included in the war supplementary budget?"
He also pointed out, "With the national funding burden ratio limited, local governments are failing to properly carry out social overhead capital (SOC) projects because they are scrambling to secure matching funds," emphasizing the issue of fiscal burdens. He further criticized, "With administrative vacuums caused by local elections for heads of local governments, is it practically possible to push the project forward?"
Concerns about side effects of the project also continued. Kim emphasized, "Side effects such as false resident registration, competition for population among neighboring areas, excessive administrative demands, and imbalanced use of local currency are appearing," adding, "A comprehensive review of the project is necessary."
In response, Deputy Prime Minister Koo said, "We are trying to make gradual improvements," adding that the aim is to make it a good policy.