Government Questions Spark Debate Over Expansionary Fiscal Policy

On September 11, lawmakers clashed during a government questioning session in the National Assembly over the Lee Jae-myung administration's second cabinet reshuffle and its expansionary fiscal policy. The Democratic Party emphasized the necessity of the government's three major mega projects, while the People Power Party criticized the rising national debt.

People Power Party lawmaker Song Eon-seok stated, "The South Korean economy is facing a crisis of accelerated aging. The growth rate continues to decline, and the ladder to independence for young people has collapsed," adding, "While our economy is aging, the government is rapidly expanding." He pointed out that the projected nominal growth rate for next year is 4.6%, while government spending is set to increase by 12.8%. "Government spending is growing three times faster than economic growth," he said, stressing the need for an environment that fosters private investment and innovation rather than government expansion.

Song also raised concerns about the declining youth employment rate, questioning Prime Minister Han Seung-soo about government measures. Han expressed regret over the low youth employment rate, attributing it to changes brought about by artificial intelligence and a corporate environment that prioritizes hiring experienced workers.

In response, Song argued that government regulations and high taxes are stifling investment and job creation. He stated, "While AI has had an impact, we need to encourage companies to increase their investments," and called for policies that create structures for more entry-level hiring.

Song further criticized the rising national debt, noting that government spending has increased by 100 trillion won in just one year. He projected that under the Lee Jae-myung administration, national debt is expected to rise to 429.6 trillion won and questioned why the government is incurring debt for its future response fund.

In reply, Han stated, "Tax revenues are increasing, and the national debt ratio is decreasing," highlighting improvements in exports across various sectors, including AI, semiconductors, shipbuilding, and K-beauty. He acknowledged the need to address the disparity in living conditions and mentioned that the government is working with companies to create opportunities for youth employment through the K-New Deal.

Regarding the future response fund, Han explained, "Companies sometimes take out loans even when they have cash reserves because they need to invest in critical industries and prepare for the future," assuring that measures related to debt will be established while maintaining fiscal soundness.

Song also pressed Han on allegations against Kim Seung-won, the nominee for Minister of Justice, regarding stock price manipulation. He asked, "Is the government taking action against Kim's serious allegations of stock manipulation, especially after the President stated that those involved in such actions would face dire consequences?"

Han responded, "As you mentioned, there are many allegations regarding the nominee. The nominee will clarify these issues during the confirmation hearing, and necessary procedures will follow afterward." Meanwhile, the ruling party attacked independent lawmaker Han Dong-hoon, who has raised concerns about Kim.

Democratic Party lawmaker Jeong Jin-wook criticized the opposition for focusing on controversies rather than evaluating the candidates' policy capabilities and expertise. He specifically pointed out that Han Dong-hoon has been using illegal investigative information to attack Kim.

When Jeong inquired about Han's claim of being surveilled by the Prime Minister's Office, Han expressed regret but questioned whether the term "surveillance" was appropriate in this context. He assured that measures are being put in place to prevent such incidents from happening again.

Jeong also raised concerns about the prosecution's search of a new drug development company's founder, Professor Kang, and a broker identified as Yang, noting that the name of President Lee Jae-myung appeared in forensic search terms. He suggested that there was an attempt to involve the President in a fabricated indictment.

He argued, "This is a political investigation and manipulation aimed at wrongfully linking the President, and a thorough investigation is necessary." Jeong also advocated for tax incentives not only for companies involved in the three mega projects but also for workers in strategic industries within mega special zones.

In response, Han emphasized the importance of companies relocating to these areas, stating, "Previously, companies were less inclined to move, resulting in limited effects. This time, the relocation of companies is crucial, and we are considering the living conditions for those moving to these areas as part of a comprehensive project." He added that preparations are underway for the introduction of the mega special zone system, although he could not provide definitive details on the extent of corporate benefits.