Recovery of people's livelihood, entering a speed battle - Lee Jae-myung government's first supplementary budget expected to be submitted to the National Assembly, possibility of a state of the nation address?

Recovery of livelihoods, entering a speed battle

In June 2025, the Lee Jae-myung government embarked on its first comprehensive supplementary budget, engaging in a 'race against time' for the stabilization of people's livelihoods and economic recovery. This supplementary budget, which has been presented as a concrete fiscal policy emphasizing 'genuine livelihood recovery' since the moment of taking office, is prepared at a scale of approximately 20 trillion won and carries significant political and economic implications as it targets both the livelihoods of the people and the regional economy simultaneously.

Policy trends revealed by the president's directives

On June 9, President Lee Jae-myung instructed the Prime Minister and the ministers of economic departments to "swiftly prepare a supplementary budget for economic recovery and consumer stimulation." The President stated, "We need to boost the sluggish consumer sentiment, and the benefits must reach the practical realities of life," demanding specific financial input. He particularly emphasized the need to "first approach the most vulnerable individuals, small business owners, and regions experiencing population decline." This is interpreted as a declaration that aims to clarify policy priorities for the socially disadvantaged, going beyond mere economic stimulation. At the same time, it appears that President Lee's fundamental policy philosophy is reflected in the supplementary budget, which addresses regional disparities between the metropolitan and non-metropolitan areas and aims for structural recovery rather than temporary support.

An additional budget of 20 trillion won, the key is the combination of 'universality and differentiation'

The key aspect of this supplementary budget is the support fund for livelihood recovery. The government and ruling party, through discussions on June 18, established a basic principle of providing at least 150,000 won to all citizens, while adopting a differentiated support method of up to 400,000 won or more for vulnerable social groups such as basic livelihood recipients, those in the next-lowest income bracket, single-parent families, as well as residents in non-capital areas and depopulated regions. This represents an unprecedented structure of 'universal and selective' support, aiming for both economic efficacy and political persuasion. Furthermore, it was decided to significantly expand the issuance of local currency. In line with the strategy to boost economic recovery centered on local businesses, the discount rates for local love gift certificates will be preferentially applied in areas experiencing population decline, and the total issuance volume is planned to be more than doubled. This budget aims to revive local consumption, which has decreased after the pandemic, and is also connected to nationwide regional balance policies.

Including debt reduction for small business owners and self-employed individuals

Debt relief for small business owners and self-employed individuals has also been included. As the repayment burden of those who have relied on loans during the pandemic has become a reality, raising the risk of bankruptcy, the government announced it would purchase some bad debts through the Credit Recovery Committee to alleviate this burden and expand the rehabilitation support program for small businesses. Accordingly, about 3 trillion won is expected to be allocated as direct or indirect debt adjustment budget. The scale of this supplementary budget is organized at around 20 trillion won, which, when combined with the previously announced 13.8 trillion won of the first supplementary budget, brings the total fiscal expansion to around 34 to 35 trillion won to be injected in the first half of this year.

Cabinet meeting decision, procedures for transmission to the National Assembly

The government is set to make a final decision on the supplementary budget proposal during the Cabinet meeting on June 23. President Lee Jae-myung is expected to personally chair the meeting, where remarks emphasizing policy urgency and the stability of people's livelihoods are anticipated. The president has already stated, "The speed of finance is the speed that citizens feel in their lives," directing 'agility' in all procedures from budget preparation to execution. Immediately after the Cabinet's decision, the government will submit the budget proposal to the National Assembly, which will then undergo scrutiny by the Special Committee on Budget and Accounts. Depending on the schedule, the goal is to pass it in a plenary session by the end of June at the earliest or by early July at the latest, and accordingly, preliminary reviews by relevant standing committees are expected to be expedited. As this supplementary budget is aimed at all citizens, there is not much opposition between the ruling and opposition parties, but some adjustments regarding the payment methods, levels of differentiated support, and the proportion of local currency funding are likely to be unavoidable.

Possibility and Political Significance of the Presidential Address

The attention is focused on whether President Lee Jae-myung will give a policy speech. Generally, the preparation of supplementary budgets can typically be substituted with explanations from the government however, it is exceptional for the president to directly address the National Assembly in a plenary session. Given that this supplementary budget is the 'first comprehensive livelihood supplementary budget' of the Lee Jae-myung administration, the possibility of the president coming to the National Assembly to deliver a speech is considered very high. If the policy speech materializes, the president is expected to emphasize the legitimacy of livelihood recovery and the urgency of fiscal input while persuading the public and the National Assembly. In particular, the 'direct message to the public' focusing on three keywords – welfare, balance, and recovery – is likely to draw attention. There is also a possibility that the president will urge cooperation between the ruling and opposition parties and emphasize "fiscal responsible politics" to accelerate the recovery of the real economy.

Political and Economic Testbed of Expansionary Fiscal Policy after the Supplementary Budget

This supplementary budget is not only a one-time policy for short-term economic recovery but also a test that can assess the overall economic philosophy and fiscal stance of the Lee Jae-myung administration in the future. The multi-layered fiscal structure that simultaneously promotes welfare, regional balance, and the revival of self-employed individuals clearly marks a departure from the conservative budgeting approach seen so far. However, the opposition party is expected to raise concerns during future National Assembly discussions regarding the fairness of the payment criteria, the transparency of funding sources, and the potential for undermining fiscal soundness, calling for some reductions or adjustments. In response, the government needs to provide logical arguments supported by specific data and figures that back the purpose and efficiency of the supplementary budget. Above all, what matters most is the tangible impact that the fiscal measures will have on the lives of the people. While the speed and scale have been prepared, if this does not translate into real experiences for citizens, the supplementary budget may only leave behind political symbolism. The direction of the first supplementary budget of the Lee Jae-myung administration is now entering the evaluation phase of the National Assembly and the public.