Park Hong-keun, nominee for Minister of the Planning and Budget Office, emphasized on the 3rd that "the Republic of Korea currently needs an active role for fiscal policy." With a four-term senior lawmaker known for advocating expansionary fiscal policy taking the helm of the nation's budget authority, forecasts suggest spending expansion including supplementary budget compilation will accelerate.
Park made the remarks while arriving at his confirmation hearing preparation office at the Korea Deposit Insurance Corporation in Seoul. "The Republic of Korea is advancing toward a hyper-innovation economy together with President Lee Jae-myung amid structural and complex crises," he said. "At times like this, an active role for fiscal policy is necessary."
He also expressed willingness to undertake bold fiscal restructuring. "Fiscal resources are not an inexhaustible well, so they must be spent in the right places, and non-essential budgets must be boldly trimmed to maximize efficiency," Park said. "Through bold restructuring, I want to do my best to ensure fiscal policy serves as economic pump-priming that reaches every corner of local communities."
Park, who personally led the separation of the Planning Office at the State Affairs Planning Committee last year, identified establishing a mid-to-long-term national development strategy tentatively called "Future Vision 2050" as a core priority after his appointment. "One of the most central functions of the Planning Office is designing new national strategies," he said. "The Planning Office will faithfully serve as the architect of Korea's future."
However, when asked about the possibility of a supplementary budget, he avoided a direct answer, saying "this must be discussed in consultation with the Presidential Office and government ministries." President Lee has repeatedly emphasized the need for a supplementary budget at recent Cabinet meetings.
Park, who emphasized active fiscal policy from his first day, is classified as a representative expansionary fiscal advocate within the ruling party. At the end of last year, while processing a 728 trillion won budget in the National Assembly—an 8.1% increase from the previous year—he assessed: "Although national finances are not abundant, there are more tasks to solve nationally than ever before. This can be seen as boldly compiling an expansionary budget." Regarding opposition concerns about rising national debt, he argued: "Reducing debt is not the priority—if we grow GDP through more efficient and focused investment, the debt ratio will decrease."
Park served consecutively as the ruling party's chief secretary and chairman of the National Assembly's Special Committee on Budget and Accounts from June 2020 to August 2021. Having led the passage of the 2021 main budget and four supplementary budgets through plenary sessions, interpretations suggest President Lee's determination for supplementary budget compilation was reflected in Park's selection.
During the second supplementary budget of 2021, as Budget Committee chairman, he advocated distributing 200,000 won in COVID-19 relief funds to all citizens but expressed regret after facing opposition from the Ministry of Economy and Finance, which proposed giving 250,000 won to 88% of citizens.
When the Yoon Suk-yeol administration launched in 2022 and pursued a supplementary budget centered on expenditure restructuring, Park, then floor leader, strongly criticized: "Additional government bond issuance is inevitable."
A Planning Office official said: "Specific roadmaps will emerge after the minister's appointment, but it's true that outside observers are already saying this year's supplementary budget and next year's budget proposal will continue the expansionary fiscal stance."
Among fiscal experts, calls are emerging for sophisticated expansionary fiscal policy. With U.S. tariff uncertainty compounded by growing possibilities of full-scale war with Iran, pushing through a supplementary budget worth tens of trillions of won could trigger side effects such as rising government bond rates and exchange rates.
Kim Sang-bong, professor of economics at Hansung University, said: "If a supplementary budget is hastily compiled, bond and market interest rates will rise due to government bond issuance, potentially causing significant harm to borrowers." He added: "This year's budget has already increased substantially, so there's no need to discuss a supplementary budget—there's no guarantee that increased fiscal spending will translate into equivalent growth." The urgent priority now is escaping long-term low growth, and accumulating debt through temporary expansionary fiscal policy could amplify side effects if growth rates decline next year.
Yeom Myung-bae, emeritus professor of economics at Chungnam National University, also noted: "The so-called debt-financing approach of trying to grow the economy through expansionary fiscal policy does not properly grow the economy." He added: "Frequent expansionary fiscal measures through supplementary budgets could raise prices, interest rates, and exchange rates while lowering national credit ratings. Reduced private investment due to crowding-out effects is also concerning."
Furthermore, according to the National Finance Act, supplementary budgets are permitted only during urgent national crises such as war, unexpected disasters, or sudden mass unemployment when regular budgets cannot be mobilized in time. Professor Yeom diagnosed that continuously compiling supplementary budgets as if they were a "magic sword" is not an appropriate approach.
