Lee Jae-myung Faces Crucial Test with $540 Billion 'Super Budget'
President Lee Jae-myung faces a critical juncture in securing passage of the proposed $540 billion (KRW 728 trillion) budget for the coming year. This budget represents a key test of the nation's fiscal management, and attention is focused on the direction of negotiations between the ruling and opposition parties.
Having completed the APEC summit and diplomatic engagements with the U.S. and Japan, President Lee Jae-myung is expected to shift into 'domestic policy mode' with a parliamentary address on November 4th. This is interpreted as a demonstration of his commitment to focusing on domestic issues, building on the achievements made on the international stage.
The government has submitted a $540 billion budget for 2026 to the National Assembly for review, representing an 8.1% increase in total expenditure compared to the 2025 budget. While the government claims the budget prioritizes economic growth and public welfare, the opposition party has expressed concerns about its potential impact on fiscal soundness.
The most contentious issues surrounding the budget are the fate of the local currency program (worth $18 billion) and certain cash-based support programs, such as the National Growth Fund. While the government argues that these programs contribute to revitalizing local economies and stabilizing livelihoods, the opposition criticizes them as populist policies ahead of the elections.
Park Sung-hoon, Senior Spokesperson, strongly criticized, "Lee Jae-myung administration's $540 billion 'debt-fueled budget' is nothing more than a cash handout for the local elections." He pointed out the problems with the budget and emphasized the need to reduce unnecessary spending through thorough verification during the budget review process.
In response, Kim Byung-ki, Floor Leader of the Democratic Party of Korea, emphasized the importance of securing funding for sectors such as AI, semiconductors, and R&D, stating that "AI, semiconductors, and R&D are the core of national competitiveness." He argued that neglecting investments in strengthening future industrial competitiveness would jeopardize the future of South Korea.
The ruling and opposition parties are expected to clash sharply over the specific line items in the budget. In particular, fierce debate is anticipated over social welfare spending, defense spending, and R&D funding. Each party is expected to exert all efforts to secure funding for their respective constituencies.
Meanwhile, the National Assembly's Operations Committee audit is scheduled for November 6th, and various political issues are expected to be discussed in addition to the budget. The audit is expected to feature sharp questioning of the government's policy-making process and implementation.
The passage of this budget will serve as a touchstone for evaluating President Lee Jae-myung's leadership. It remains to be seen whether constructive budget adjustments can be made through genuine consultation between the ruling and opposition parties for the sake of national development.
It is important to gather opinions from all sectors and seek reasonable alternatives during the budget review process. A transparent and fair review must be conducted to create a budget that provides practical assistance to the lives of the people.
The National Assembly plans to form a Special Committee on Budget and Accounts to review the 2026 budget and begin full-scale deliberations. The budget must pass the National Assembly plenary session by December 2, the legal deadline for processing.
The government plans to actively cooperate with the National Assembly's budget review and provide necessary data. In addition, it plans to conduct various promotional activities to help the public understand the budget.
