"Claims of a burden on local governments are far-fetched"… President Lee rebuts controversy over high-oil-price relief funds

President Lee Jae-myung squarely pushed back against criticism that compiling high-oil-price relief funds could increase the fiscal burden on local governments. He said the additional resources paid to local governments through the supplementary budget are larger.

On the 5th, in a post on X (formerly Twitter), President Lee referenced media reports citing a National Assembly Budget Office report, saying, "The local shared tax allocated to bolster local governments' fiscal capacity under this supplementary budget totals 9.7 trillion won, while local governments' matching funds for the relief-fund program are about 1.3 trillion won."

He added, "In the end, local governments' fiscal capacity increases by 8.4 trillion won," and called it "elementary arithmetic." This was in response to claims that local governments would face a burden because their share of the high-oil-price relief program costs is estimated at around 1.32 trillion won; he argued that, looking at the overall fiscal structure, an interpretation of increased burden does not hold.

President Lee also said criticism over local governments' autonomy should be distinguished from claims of an expanded fiscal burden. He noted, "One may criticize it as infringing on local governments' autonomous decision-making over the increased fiscal capacity, but it is not correct to say the burden increases when overall finances are growing."

He also emphasized that participation in the support program is not mandatory. "If local governments don't want to cover 20~30%, they don't have to participate," he said, adding, "But since the central government covers 70~80% of the support payments made to local residents, there is little reason to refuse." He added, "One can hope the government will shoulder a bit more."

Reporter Oh Se-seong, Hankyung.com sesung@hankyung.com