Lee Hyung-il, acting Minister of Economy and Finance and first vice minister, drew the line stating there will be no third supplementary budget.
On the 20th, the acting minister appeared on MBC Radio's 'Kim Jong-bae's Focus' and said, "There is currently no plan for (this year's additional supplementary budget)."
The previous day, the government announced a supplementary budget plan of 30.5 trillion won, stating that it would provide public recovery support coupons worth 150,000 to 520,000 won per person to stimulate consumption. This is the second supplementary budget of the year, following last month's 13.8 trillion won supplementary budget.
The acting minister explained, "Since consumption is done by all citizens, I had the thought that public recovery support coupons should be given to all citizens, and it must also have a nature that varies based on income, so I judged it necessary to adopt a hybrid method that increases support according to income."
Regarding the reason for distributing the aid in two installments, he said that time is needed to select the top 10%. The acting minister noted, "Who exactly corresponds to the top 10% could be based on health insurance premiums, but the method of converting property differs between employees and local subscribers," adding, "There are issues of fairness, so the selection process is more complicated and takes longer than expected."
He continued, "I expect the supplementary budget's effect will increase the Gross Domestic Product (GDP) by about 0.2% over the next year," and he mentioned, "This year, about 0.1% of that will be reflected." The acting minister noted, "In the short term, the issuance of government bonds will increase, thus increasing the deficit," but he added, "In the long run, it will be beneficial for us."
He stated, "During sluggish periods, the expansion of fiscal policy might not stimulate inflation significantly," adding, "It doesn't mean that there is no price increase at all, but I don't think it will have a level that affects the numbers."
Regarding the inclusion of liability relief for small business self-employed individuals in the supplementary budget, the acting minister said, "Since there is no ability to repay, and they are still suffering from collection, we aim to alleviate that part and create a foundation for recovery." The government plans to absorb 16 trillion won in debt from debtors who have been in arrears for over seven years with amounts under 50 million won, incurring tax costs of 400 billion won.
Concerning the real estate market, the acting minister said, "The real estate market is very severe, especially in the Seoul metropolitan area," adding, "We are closely analyzing and reviewing the market situation with relevant ministries and experts." He further mentioned, "If we are to reform the tax system to stabilize the market, I think we should approach it cautiously, considering the policy effects and impacts on the market," indicating there won't be immediate measures.
Regarding household lending, he stated, "We are continuously managing it tightly now," adding, "This is a series of situations and will progress continuously."