Lee says budget will boost local finances

President Lee Jae-myung on April 5 rejected concerns that a proposed supplementary budget, often referred to as a “war budget,” would strain local government finances, arguing it would instead expand their fiscal capacity.

In a post on X, Lee shared a media report citing an analysis by the National Assembly Budget Office and dismissed claims of increased financial pressure on local governments. “An increase in the financial burden makes no sense,” he wrote. The report said that of the 6.14 trillion won allocated for high energy price relief, about 1.32 trillion won would be borne by local governments, which could pose challenges depending on their fiscal conditions.

Lee said the relief payments, which are fully distributed to residents, would be financed 70 to 80 percent by the central government, with local governments covering the remaining 20 to 30 percent. He added that the budget includes 9.7 trillion won in local allocation tax revenue to reinforce local finances, compared with roughly 1.3 trillion won in local contributions to the relief program.

“That means local governments’ fiscal capacity will increase by 8.4 trillion won,” Lee said. “The answer is clear. Has the burden increased or decreased? It has decreased. This is basic arithmetic.”

He added that while criticism over possible limits on local governments’ discretion in using expanded fiscal resources may be valid, claims that the budget increases their financial burden are not.

Separately, Lee attended a joint Easter service of Korean churches at Yoido Full Gospel Church in Seoul’s Yeongdeungpo District. He said the government would step up support for vulnerable groups and use all available policy tools to prevent the current crisis from worsening and to keep those in hardship from falling deeper into distress.


윤다빈 기자 empty@donga.com