Jang Dong-hyuk, leader of the People Power Party (PPP), sharply criticized the government's 26 trillion won ($18.2 billion) "wartime supplementary budget," calling it "a supplementary budget for elections in reality, despite being labeled a wartime budget."
Jang made the remarks at a supreme council meeting at the National Assembly in Yeouido, Seoul, on Monday. "They are handing out cash of up to 600,000 won to 70% of the population and have included discounts on movies and accommodation, as well as support for culture and arts," he said. "This is about buying votes for the local elections."
Jang specifically warned that "many experts are sounding the alarm about stagflation." He added, "The exchange rate still far exceeds 1,500 won per dollar, and prices and interest rates are soaring with no end in sight."
"If money is pumped into the economy, inflation will accelerate even faster, and the money released will boomerang back and hit people's livelihoods," he warned.
"Once the local elections are over, they will raise property holding taxes, cigarette prices, and income taxes, and even create a sugar tax to collect several times that amount," Jang said. "If a supplementary budget is unavoidable, it should be a targeted-support budget, not a cash-handout budget," he stressed.
Jang also directly criticized the Lee Jae-myung administration's real estate policies. "I personally visited real estate offices in Mapo-gu and confirmed that jeonse (lump-sum deposit lease) and monthly rent prices are surging and supply has dried up," he said. "This was a problem that was fully foreseeable when the October 15 real estate measures were implemented, yet the government ignored warnings from the opposition party and experts."
"And yet this administration is going in the opposite direction," he continued. "Now they say they will even block extensions of mortgage loans."
"Under the land transaction permit system and lending regulations, people cannot sell even if they want to, and a flood of foreclosed properties from borrowers unable to repay their debts could pour onto the market," Jang said. "Jeonse supply will dry up even further and monthly rents will surge even more."
"What is needed is not more regulation but a proper increase in supply," he added. "They should first unlock redevelopment and reconstruction projects and present effective jeonse and monthly rent policies."