'Austerity spiral' under Yoon era a cautionary tale, minister says; calls for renewal in Lee administration's second phase

Minister of Planning and Budget Park Hong-keun [Newsis]
Minister of Planning and Budget Park Hong-keun [Newsis]

Minister of Planning and Budget Park Hong-keun said Sunday that the Honam semiconductor cluster — a flagship policy of the Lee Jae Myung administration — does not amount to coercing private companies, pushing back against criticism that the government is twisting the arms of businesses.

Speaking in an interview with KBC Gwangju Broadcasting that day, Park said, "Everything has its moment, and this one has come together well."

He added that construction of a fourth-generation semiconductor fabrication plant is underway and that, if the project moves quickly and market conditions hold, further scale-up is also being considered.

"We feel a strong obligation to deliver results here," Park said, adding that the government plans to support the region through three major mega-projects and infrastructure investments in rail and highways across the Honam area.

On the establishment of a medical school in the Honam region, Park said the issue is critical to closing the healthcare gap and that the government's commitment to providing the necessary support is firm.

Turning to next year's budget proposal — totaling 820.9 trillion won ($604 billion) — Park said the government aims to achieve growth-driven fiscal soundness through bold investment in the future.

He criticized the previous Yoon Suk Yeol administration for what he called an "austerity spiral," saying it cut corporate taxes while pulling back on active investment during a sluggish economy. "Naturally, the economy slowed further and tax revenues dried up," he said.

"We cannot go down that path," Park said, arguing that active fiscal policy can grow the economy, broaden the revenue base and create a virtuous cycle that allows for reinvestment. "Building that virtuous cycle is the right way to manage public finances," he said.

On the recent slide in President Lee Jae Myung's approval rating, Park said the administration was born out of what he called a "revolution of light" and must rebuild trust with civil society and progressive forces. "Even where there are differences, genuine solidarity is what will restore support," he said.

Park said the president is fully aware of the situation and expressed confidence that support can be regained if the second phase of the Lee administration begins with a renewed sense of resolve. He noted that Lee has already begun to address the issue publicly through recent press conferences.

Park described the president as "a truly capable person whose head is completely full of thoughts about the country and the people — someone driven entirely by work." He said Lee's perspective on the world is fundamentally different from those who came up through student movements, civic activism or party politics, adding, "He has a remarkably quick grasp of how to get things done."


oskymoon@heraldcorp.com