[ad_1]
Fourth supplement in 59 years … Issuing deficit Treasuries, Narat’s debt is approaching 850 trillion won
As damage to vulnerable groups increases due to the 2.5 step distance extension, the fourth supplement
The 1st and 3rd complementary accounts have already tightened their belts and it is inevitable to issue deficit government bonds.
Reporter Song Hyun-soo [email protected]
Check-in: 2020-09-06 08:39:30Revision: 2020-09-06 18:35:40Published: 2020-09-06 18:36:16
Following the reproliferation of Corona 19, the 4th supplemental budget plan (additional plan) after 59 years was officially formulated on the 6th.
Furthermore, the Democratic Party and the government believe that support through the 4th Supplemental System is inevitable as the harm suffered by the self-employed, small business owners, disadvantaged and low-income groups is severe.
However, there is also great concern that the issuance of deficit Treasury bonds for the 4th supplementary budget will increase the size of the debt, which has already increased due to the three additions, which will deteriorate fiscal soundness.
■ Snowballs from vulnerable groups … 4th supplementary clamp support
It has been 59 years since 1961 to organize additional supplemental accounts four times a year. In 1961, four additional supplemental events were organized: April, June, August, and October.
In March this year, the government organized the first supplemental budget worth 11 trillion won to respond to Corona 19, including support for Daegu and Gyeongbuk. In April, a second supplemental supplement of 12.2 billion won was executed to pay 1 million won for emergency disaster support for the entire population based on a household of four.
Since then, while the economic hardships caused by Corona 19 continued, a third supplemental supplement of 3,510 billion won was prepared and executed in July, the largest ever, and the fourth supplemental supplement in two months was organized.
It is also unusual to organize an additional draft with next year’s budget proposal presented to the National Assembly.
After democratization, the Ministry of Strategy and Finance was initially in a negative position with respect to the unprecedented fourth additional budget.
However, as the degree of economic damage caused by Corona 19 increased and the opposition parties demanded it with one voice, they finally moved towards the organization of a fourth supplementary administration for emergency assistance to victims.
In particular, after one week of extension of step 2.5 of social distancing on day 4, support was deemed no longer possible with existing financial resources.
However, taking into account the financial strength and the effects of the support, it was decided to choose a method of “pincer assistance” for the victims rather than paying the entire village in cash as the first emergency disaster support fund.
A fourth supplemental supplement is expected to be organized with the second emergency employment stabilization grant for the disadvantaged such as special job type workers (special high school), reduced sales, new funds for small business owners for small owners businesses and emergency living expenses for low-income people.
The problem is finances.
The government has already adjusted the waistline and restructured spending in the process of organizing the three additional budgets.
It is inevitable that the government will have no more ‘money gaps’ to issue deficit government bonds when it organizes the fourth supplement.
■ The national debt closes at 850 trillion won when it is increased by issuing all deficit government bonds.
If the 4th additional financial resources of KRW 7 trillion are obtained by issuing deficit Treasury bonds, concerns about fiscal soundness are expected to increase.
The government issued deficit treasury bonds of 1.3 trillion won in the first supplement this year, 3.4 trillion won in the second supplement, and 23.8 trillion won in the third supplement.
After the third supplement, the national debt soared to 89.4 trillion won and the ratio of the national debt to gross domestic product (GDP) rose to an all-time high of 43.5%.
If an additional 7 trillion won in deficit government bonds are issued for the fourth supplemental budget, the national debt would reach 850 trillion won to 846 trillion won. The national debt ratio is also expected to rise to 43.9%, putting 44% on the top.
The national debt perspective should also be reviewed in the draft budget for next year presented by the government to the National Assembly.
Next year, the national debt is expected to exceed 950 trillion won from 945 trillion won to 952 trillion won, and the national debt ratio is expected to rise 0.4 percentage points (P) from 46.7 percent. one hundred to 47.1 percent.
Economists emphasize that even if the government is forced to organize one more additional budget, concerns about fiscal soundness should not be forgotten.
Professor Yeom Myung-bae of Chungnam National University said: “It is not advisable to continue to use the ‘consumer prescription’ through supplementary administration. However, if the organization is unavoidable to support the difficult class, We must also consider how to pay the debt incurred by the issuance of deficit government bonds. I do it, “he said.
Professor Yeom said: “The government is implementing an active fiscal policy because finance must play a role as a breakwater and support, but if finances collapse backwards, there is a possibility that it will become a major disaster.” We will also have to come up with a plan for long-term financial restoration.
Reporter Song Hyun-soo [email protected]
