How to raise 10 trillion won in the 4th disaster support fund? ‘The era of 1,000 trillion of national debt’ is moving ahead

In addition, Democratic Party representative Kim Tae-nyeon speaks at a press conference to convey the public sentiment of Seolmin at the National Assembly in Yeouido, Seoul on the afternoon of the 14th. Reporter Won Dae-yeon [email protected]
In addition, the Democratic Party announced that it would first raise funds for the 4th disaster subsidy through budget restructuring, but the Ministry of Strategy and Finance suggested that it would be difficult to restructure spending, suggesting a plan to finance most of the deficit government bonds. As the possibility of replenishing most of the financial resources required for the 4th subsidy with debt increases, there are observations that the’era of 1,000 trillion won in national debt’, which was originally expected next year, may be accelerated.

According to the Ministry of Science and Technology and the Democratic Party on the 14th, the party government is planning to organize an additional budget for the selection of industries affected by the new coronavirus infection (Corona 19) and the vulnerable as early as this month. However, as the government and the ruling party disagree over how to finance the subsidies, the timing of the additional budget may be delayed depending on the progress of the discussion.

On that day, Democratic Party leader Kim Tae-nyeon said at a press conference, “I will secure some of the funds through the restructuring of spending on the current budget and issue government bonds if inevitable.” It means that the existing budget will be restructured to raise financial resources as much as possible, and government bonds will finance the shortfall. When the first disaster support fund was paid last year, the party government prepared 8,800 billion KRW out of a total of 1.43 trillion KRW as an expenditure restructuring.

However, the Ministry of Science and Technology believes that most of the financial resources should be financed through government bonds because there is a limit to restructuring expenditures since the budget was properly executed at the beginning of the year. In reality, it is difficult to finance subsidies without increasing the debt. An official from the Ministry of Science and Technology said, “There are many budgets that have not been executed since the beginning of the year, so it is not easy to forcefully reduce the budget. . As the party government is pursuing a plan to expand the target and scale of support rather than the third subsidy, if large-scale government bond issuance becomes a reality, national debt is expected to increase rapidly. The fourth subsidy is estimated to be at least 10 trillion won, and the ruling party is also open to the possibility of providing subsidies to the entire public in consideration of the spread of coronavirus.

Based on this year’s budget, the national debt at the end of the year is expected to be 956 trillion won. However, if deficit government bonds are issued at a scale of 10 trillion won for the fourth subsidy payment, the national debt is expected to increase to 966 trillion won and the ratio of national debt to GDP is expected to rise to 47.8%. If the corona does not subside and additional subsidies are needed, or if the payment of the whole country is re-discussed, the national debt may exceed 1,000 trillion won.

Sejong = Reporter Song Chung-Hyun [email protected]

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