Seoul: President Lee Jae Myung emphasized the necessity of prioritizing economic growth over welfare expansion, stating it is currently unrealistic to pursue both simultaneously. On Wednesday, the president shared his views via a message on his X account, where he referenced a media column critiquing the government's forthcoming budget proposal for its relatively low allocation towards "distribution."
According to Yonhap News Agency, Lee asserted that while the ideal scenario would involve an expansion of both growth and welfare, the current focus should be on enlarging the economic pie. He warned against forsaking growth in favor of welfare expansion, suggesting that such a move could exacerbate economic polarization and potentially undermine welfare efforts.
Despite these remarks, President Lee reassured the public that the government has not reduced welfare spending. He acknowledged the importance of improving welfare policies and indicated that further action would necessitate additional time.
The context for Lee's statements is the government's recent proposal of a record 820.9 trillion-won (approximately US$599 billion) budget for the upcoming year. This figure marks an increase of more than 10 percent compared to this year, driven largely by anticipated tax revenue gains from a thriving semiconductor industry. During a Cabinet meeting, Lee highlighted the enhancement of global industrial competitiveness as a key objective of the proposed budget.
Additionally, a presidential aide appearing on a CBS radio program discussed the fiscal implications of the semiconductor boom. The aide projected corporate tax revenue to surpass 200 trillion won next year, describing it as a "jackpot." Ryu Deok-hyun, responsible for fiscal planning, indicated that total tax revenue is expected to exceed 580 trillion won by 2027, with growth driven by increased income, stock trading, and consumption. Ryu noted that any revenue exceeding 400 trillion won is significant and underlined the importance of strategic government spending decisions to allocate resources effectively.