President Lee to Deliver Address on 821 Trillion Won Budget Bill on the 2nd; Ruling and Opposition Parties Brace for Clash Over 134 Trillion Won in Cuts

[Financial News] President Lee Jae Myung will deliver a policy address on next year’s 821 trillion won budget bill on the 2nd. He is expected to outline plans to secure future growth engines and stabilize people’s livelihoods through the largest-ever expansionary fiscal policy, and to ask the National Assembly for its cooperation. However, a fierce budget battle between the ruling and opposition parties is expected, as the People Power Party considers cuts of up to 134 trillion won and the Democratic Party of Korea pushes to increase livelihood-related spending.
Kang Yoo-jung, senior spokesperson for the Blue House, said in a media notice on the 1st, “President Lee will deliver a policy address on the 2027 budget bill on the 2nd.” In his address, Lee is expected to explain the need for key fiscal programs and their anticipated effects, and call for the smooth passage of the budget bill.
The budget bill for next year submitted by the government to the National Assembly totals 820.9 trillion won in total expenditure. That is 93 trillion won (12.8%) more than this year’s initial budget of 727.9 trillion won, making it the largest on record. The government plans to direct spending toward securing future growth engines, stabilizing people’s livelihoods, and promoting locally led growth. A key priority is strengthening the foundations for growth by developing advanced industries such as semiconductors and expanding future investment.
But the ruling and opposition parties are clearly divided ahead of the budget review. The People Power Party, saying the government’s large-scale fiscal spending could increase the burden of national debt, is considering cuts of up to 134 trillion won. It has cited the Blue House’s and the Serious Crimes Investigation Agency’s special activity funds, as well as cash-based support programs, among the main targets for cuts.
The Democratic Party of Korea, by contrast, plans to support the government’s expansionary fiscal policy while increasing budgets related to people’s livelihoods, including those for jobs, housing, financing for ordinary citizens, and regional growth. It believes active fiscal investment is needed to support an economic recovery and develop future industries.
The biggest point of contention is the 162 trillion won Future Fund. Of that amount, about 45.4 trillion won is budgeted for next year’s programs. A proposal calls for using 12.5 trillion won to reduce new government bond issuance and managing about 104 trillion won as surplus funds.
The People Power Party is concerned that the large pool of surplus funds could be used as a source of financing beyond the National Assembly’s budgetary control. The ruling party, by contrast, says fiscal capacity generated by factors such as the semiconductor boom should be used to secure future growth engines. A dispute is expected over how the fund is established, the transparency of fund management, and the level of National Assembly oversight.
The standoff between the ruling and opposition parties over the president’s policy address is another factor, separate from the budget review. Within the People Power Party, members are objecting to the Democratic Party’s push for a parliamentary investigation into Chief Justice Cho Hee-dae. The address could intensify tensions between the parties from the outset of the budget negotiations.
The Special Committee on Budget and Accounts of the National Assembly will begin comprehensive policy questioning on the 4th and 5th, followed by reviews by ministry on the 9th and 10th for economic ministries and on the 11th and 12th for non-economic ministries. From the 16th, it is scheduled to convene its Budget Bill Adjustment Subcommittee to discuss increases and cuts to individual programs. The constitutional deadline for passing the budget bill is December 2.
[email protected] Kim Kyung-min, Seong Seok-woo Reporter