The government has presented a blueprint for a supplementary budget of 10 trillion won aimed at responding to wildfires, trade, artificial intelligence, and restoring people's livelihoods. Initially, it only provided a guideline for the intention to push for a supplementary budget and its aggregate amount of '10 trillion won,' leaving detailed discussions to the National Assembly; however, as discussions regarding the supplementary budget have stalled, there are observations that the government has taken the reins again. However, voices from both the Democratic Party and the Power of the People are calling for an expansion of the supplementary budget, making it unlikely that the government proposal will pass the National Assembly as it stands.
On the 8th, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok said at a meeting of economic ministers held at the Government Seoul Complex, “Support for wildfire damage is urgent, and we cannot just watch as unprecedented tariff shocks pose serious threats to our industries and corporations,” adding, “I will announce a supplementary budget plan of 10 trillion won early next week.”
At the meeting, Deputy Prime Minister Choi also revealed the details of the supplementary budget the government is planning. First, he stated that there will be a proposed budget of 3 trillion to 4 trillion won for responding to trade and strengthening AI competitiveness and another 3 trillion to 4 trillion won for supporting people's livelihoods. While specific figures regarding wildfire response have not been disclosed, it is expected that the aggregate will likely be around 2 trillion to 3 trillion won given the overall budget is 10 trillion won.
Regarding wildfire response, the plan will primarily include funding for recovery work and the additional procurement of drones for wildfire monitoring and high-performance helicopters, covering future wildfire prevention expenses. A Ministry of Economy and Finance official remarked, “We cannot precisely calculate the wildfire response budget since the exact scale of wildfire damage and the schedule for recovery work have not yet been confirmed.”
The budget for enhancing trade and AI competitiveness will reflect significant expansions of 'tariff responses and export vouchers' and will include additional policy finance for emergency management stabilization funds. Plans are in place to establish investment subsidies for materials, parts, and equipment to stabilize supply chains, along with expansions of investment subsidies for reshoring corporations returning to the country. A budget will also be allocated in the supplementary budget to secure over 10,000 high-performance GPUs. It is reported that the price of the high-performance semiconductor 'H100' from Nvidia used in AI development exceeds 30 million won each, necessitating at least 300 billion won to secure a minimum of 10,000 units.
The government plans to invest 3 trillion to 4 trillion won to support underprivileged citizens and small business owners struggling due to sluggish domestic demand. This funding will be allocated for low-interest policy loans to alleviate the management burdens of small business owners and for initiatives to enhance the purchasing power of low-income and vulnerable groups. It is reported that energy and essential goods purchase vouchers aimed at vulnerable groups, rather than a nationwide cash support as demanded by the Democratic Party, will be included.
The government holds the position that it should select projects among the supplementary budget demanded by both the Power of the People and the Democratic Party that have no disagreements, and rapidly push them forward to ensure that fiscal support can be sufficiently realized; however, the National Assembly has a different perspective.
Currently, the Democratic Party is demanding a 'super supplementary budget' of 35 trillion won, which includes funding for local love gift certificates. Even within the Power of the People, former representative Han Dong-hoon has urged, “10 trillion won is too little for the supplementary budget. We need to increase it boldly,” reflecting a growing voice calling for a greater fiscal role. There are also predictions that the scale of the supplementary budget may increase as major presidential candidates announce populist pledges ahead of the June elections.
Deputy Prime Minister Choi remarked, “Recent global market volatility has significantly increased due to concerns over trade wars, and our financial and foreign exchange markets are also being affected. We can no longer afford to delay our crisis response,” and earnestly requested the National Assembly to discuss and process swiftly so that we do not miss this golden time to save our industries and corporations.