The government's supplementary budget was finalized at a total of 13.8 trillion won after discussions in the National Assembly. An increase of 1.6 trillion won was made from the initial government proposal of 12.2 trillion won. An allocation of 400 billion won was reflected for the issuance of local love gift certificates, which the Democratic Party of Korea has been demanding.
On the 1st, the National Assembly approved the '2025 supplementary budget' in a plenary session. The supplementary budget that passed the plenary session saw an increase of a total of 1.8 trillion won allocated for disaster response and recovery of 1 billion won, enhancing competitiveness in trade and artificial intelligence (AI) with 1 billion won, and bolstering the construction market with 8 billion won. Additionally, 200 billion won was reduced due to adjustments in some loan projects.
◇ Fastest passage in 20 years… Speed strategy for wildfires, livelihoods, and construction
This supplementary budget passed in the plenary session just 11 days after being submitted to the National Assembly on April 21. This is the fastest passage in 20 years since the first supplementary budget in 2006, which took 12 days. The government explained that the accelerated process was to respond to urgent issues such as wildfire damage recovery, trade responses, crises in livelihoods, and sluggish construction.
With the expansion of the supplementary budget scale, the consolidated fiscal balance without social security fund deficit ratio is expected to widen from -2.8% to -3.3%. The government debt ratio is also projected to rise from 48.1% to 48.4%.
The most notable aspect of this supplementary budget is the support for livelihoods. To alleviate the burden of college tuition fees for low-income and multi-child households, the maximum limit for national scholarship support will rise by 7% starting in the second semester. As part of support for local small businesses, 400 billion won will be allocated for the issuance of local love gift certificates. An additional 100 billion won has been earmarked for expanding discounts on agricultural, livestock, and fisheries products.
255 billion won has been arranged for price subsidies on essential minerals for farmers. In a bid to strengthen responses to livelihood-related crimes, 10.7 billion won will go towards the establishment of deepfake, drug, and cybersecurity response equipment and systems.
A budget of 4 billion won was also allocated to establish an integrated detection system using AI for the recent telecommunications security incident. Additionally, 2 billion won will be invested to eliminate software vulnerabilities.
The national compensation fund support for workers with unpaid wages to protect their livelihoods will be expanded from 115,000 individuals to 128,000 individuals, with an additional allocation of 69 billion won.
◇ Restoration from wildfires, AI, and stimulating the construction economy… Detailed allocations by sector
In the disaster and emergency response sector, an additional 100 billion won has been allocated for wildfire damage recovery and support for residents. This includes housing cost support for disaster victims, recovery of collective relocation sites, support for purchasing agricultural machinery, establishing alternative crop bases, and recovery costs for factories and commercial buildings. An additional large helicopter for enhancing wildfire response capabilities in national parks will cost 11 billion won, while 28.7 billion won will be allocated for the early start of old sewage pipe construction to prevent sinkhole incidents in Seoul.
In the sector for enhancing competitiveness in trade and AI, 15.3 billion won is allocated for early achievement of molybdenum stockpiling goals, 8.8 billion won for additional GPU rental for corporations and academia, and 4 billion won for expanding NPU demonstration projects. Funding for building training datasets (25 billion won) and support for AI-utilized content and film production (16.5 billion won) is also included.
A budget of 812.2 billion won will be invested in construction economic stimulus projects. To help recover the housing market affected by inventory issues, new construction rental units will increase from 55,000 dwellings to 60,000 dwellings. Public support for private rentals will expand from 15,000 dwellings to 20,000 dwellings. Notably, 323.4 billion won is earmarked for the Osong-Pyeongtaek two-line project, which requires urgent additional track construction due to concentrated operations on the Gyeongbu and Honam lines.
The funds for the supplementary budget will be secured through a reduction of 200 billion won from some loan projects, 100 billion won from available fund surplus, and 1.4 trillion won from additional government bond issuance.
The government plans to hold a cabinet meeting on the 2nd to present and approve the allocation plan in response to the increased supplementary budget in the National Assembly.
The government will finalize the wildfire damage recovery plan for the Yeongnam region this week after discussions at the Central Disaster and Safety Countermeasure Headquarters and intends to provide housing and living expenses to the affected residents this month. The refund of digital Onnuri gift certificates for traditional markets will be implemented immediately after the cabinet decision and budget allocation, in conjunction with the 'May Companionship Festival.' Export vouchers for tariff-affected companies will be applied for and received this month, with payment expected in June. The purchase of high-performance GPUs is planned to be solicited between May and June with the goal of being adopted within the year.
A government official noted, "Considering the purpose of the supplementary budget to urgently respond to pressing issues our economy faces, such as wildfire damage and trade risks, the confirmed budget will be executed promptly within the year."