(EDITORIAL from the JoongAng Daily on March 11)

Sensible budget supplement

The latest economic data is baffling policy makers. Large companies still rake in
profits and pay their employees. Interest rates remain low and the real estate
market is more or less intact. On the surface, the situation doesn???t appear to
be as critical as in the days of the Asian financial crisis of the late 1990s.
But statistics tell a different story. Each day, the lower and middle income
groups comprised of small businesses, the self-employed and part-time workers
fall further to the bottom of the economic pyramid. Each month, around 100,000
small businesses close their doors. The household debt-to-income ratio is at a
more serious level than during the credit card bust in 2003. A host of small and
midsized companies are selling off equipment to pay their employees on time.
Faced with such a grim economy, the National Assembly has turned to a new theme
for its political wrangling. Lim Tae-hee, the Grand National Party???s policy
chief, recently indicated that the party was mulling a ???super-sized???
supplementary budget in the amount of 20 to 30 trillion won or more, emphasizing
that it is aimed to spur job creation. The notion was immediately panned by rival
Democratic Party leader Chung Sye-kyun, who said, ???To speak of a supplementary
budget just a few months into the year reflects how incompetent the government
is. It???s just pitiful.???
The opposition party???s scorn is understandable. The government and the ruling
party appropriated this year???s budget based on economic growth projections of 4
percent. They turned a deaf ear to the DP???s call for increased spending on
public infrastructure and social welfare, citing a need to protect the staggering
economy.
Before proposing such a sizable supplement, the government and the ruling party
should take care to remember their economic policy responsibilities. By the same
token, this is no time for the opposition to be putting its knee-jerk hostility
on display every time the ruling party makes a proposal.
In the current crisis, a substantial budget supplement is a necessity, not an
option, and the quicker it can be done, the better. The extra funds should be
directed toward job creation and shoring up the social safety net, as the
opposition party had initially sought.
Meanwhile, the ruling party needs to show some restraint and resist the urge to
talk about tax cuts. The budget supplement will be of no use if lawmakers attempt
to ease unemployment by allocating the lion???s share of the funds to public
construction projects, when they should be directed toward the needy, struggling
class.
(END)