Honorable Speaker Chung Sye-kyun, distinguished members of the National Assembly, and fellow Koreans:

I stand here to present to the public and the National Assembly the Government’s budget plan for next year, and I ask for your cooperation in passing it.

Let me begin by sharing with you the memory of an event that upended the lives of all Koreans.

It happened exactly 20 years ago: a sudden layoff notice received one day, a job lost by a household head, and the fear of unemployment and corporate restructuring. This shock did not single out any specific group; the 1997 foreign exchange crisis affected us all in an unprecedented way. The effect on people’s lives was not only economic but also psychological and emotional.

Two decades on, Korea’s economy has become very strong. Our country is now the ninth largest holder of foreign exchange reserves. The profitability of our financial institutions and businesses has greatly improved. International credit rating agencies have upgraded Korea’s sovereign ratings to a record level. The Korean economy is now a far cry from what it looked like when the country was on the brink of a sovereign default.

Our people made great sacrifices. They launched a nationwide gold collection campaign to resuscitate the national economy and keep businesses afloat. Enduring trying times while choking back bitter tears, they helped tide over the crisis. Subsequently, the national economy rebounded remarkably. 

The aftereffects, however, have changed the lives of the people.  Low growth and unemployment has become the norm. The sense of pride in being a middle-class citizen has disappeared. Now individuals alone are left to bear full responsibility for the restoration of their livelihoods, which were shaken to the core. Trapped in a mindset that a small government is better, each and every person must work their hardest to protect themselves and their families.

Overwork was a natural response to survive amid fierce competition and the nagging fear of job loss. Parents invested everything in their children’s education to get them into college, so they would not have to endure the failures of their parents. The frustration of previous generations drove the younger generation to seek stable employment in a profession or in the public sector.

A public misconception has been growing that common sense and principles cannot protect the individual in a society of unbridled competition. Concessions and compromise, solidarity and caring concern require special courage in an environment where those who fail just once find it hard to get a second chance.

As such, the socio-economic structure that was transformed by the foreign exchange crisis has damaged the fabric of people’s everyday lives.

The Sewol ferry protests on Gwanghwamun Plaza and the candlelight rallies served as venues for public debate that laid bare the social improprieties and contradictions of the past. 

The people have asked: “What is the purpose of a nation?” They demand firm resolve in eradicating irregularities and corruption and correcting inequality and unfairness. This has been in response to the reality they face: no matter how hard they try, they cannot get ahead by their own hard work.  Their voice is a declaration of the need to address the socio-economic inequality that is threatening the people’s lives and democracy.

The candlelight revolution was a milestone in illuminating the way forward, going beyond democratic restoration and taking democracy to the next level. The process has begun for us to find the answers as to what a nation should do for its people and to ensure that our country functions properly. 

My fellow Koreans,

The people have called upon the new Administration to take on the sacred duty of making our country more democratic, equitable and just.

I regard this duty as my mission, and my sole ambition. If I can carry it out even half-way, I may consider to have fulfilled the great task entrusted to me in these times. It is my ardent hope that all politicians and National Assembly members will regard this duty as their shared responsibility. 

The dignity of all human beings should be respected and protected throughout the all stages of their lives. Government policies should be overhauled so that anyone who works hard for eight hours a day will not have to worry about getting by. Systems should be improved so that anyone who is ill has access to affordable treatment. Wrong practices should be rectified so that no one will be robbed of an opportunity to pursue their dreams and talents. 

Over the past six months, my Administration and I have upheld the will of the people and laid the foundation for national innovation to turn the Republic of Korea into a properly functioning, just nation. 

I will ensure the economy is reinvented.

Even when the economy grows, household incomes dwindle, and economic inequality worsens. This economic structure must be changed. We must address the situation where the socio-economic divide impedes economic growth and social cohesion. Only then will the quality of life and the nation’s future improve. The new Administration espouses a “people-centered economy,” and this is no mere slogan. Our initiative was prompted by our becoming aware of dire reality.

The people-centered economy is designed to create a paradigm shift in the Korean economy. The conglomerate-oriented economy rapidly lifted the country out of poverty. It enabled us to achieve the kind of economic development experienced nowhere else since the end of the Second World War. Nonetheless, this arrangement can no longer guarantee our future, as evidenced by stagnating growth and the difficulties people now face.

The people-centered economy is designed to bring about bold changes for our generation and the one that follows it. I believe now is the right time for such a transformation.

Twenty years ago, we had to sacrifice much to prevent a sovereign default and repay foreign debt. Now, however, we are poised to transform ourselves. Above all, the people’s demand for change is more urgent than ever, while even expectations for change can serve to vitalize the economy.

The direction we intend to take inspires global empathy. The easing of socio-economic polarization, inclusive growth, and people-centered economics have been major topics at the G20 Summit, IMF, OECD and World Economic Forum in Davos. Notably, the theme at the United Nations General Assembly was “Focusing on People.”

I am confident Korea will be able to present a breakthrough solution to the issues of low growth and polarization, which are global concerns. The achievement of the people-centered economy will contribute to the resurgence of the Korean economy and send a message of hope for the global economy.

The people-centered economy aims at fairly distributing the fruits of economic growth. It is an economy focused on growth, in which jobs and increased household income boost domestic demand. It is an economy that provides opportunities for innovative startups and new industries. It is an economy in which all people and businesses can compete on a level playing field under fair regulations. I have so far mentioned it in the context of the three pillars—income-driven growth, innovative growth and a fair economy.

Innovative challenges and belief in success can transform the Korean economy. My Administration will embark on this ambitious path toward the people-centered economy with confidence in our people’s strength. 

The economy and society cannot go separate ways. I will make certain unfair practices and a false sense of privilege are removed from all sectors of the economy and society. Changes will be made to provide every citizen with equal and fair opportunities so that no one will be sidelined by an outdated social order or outdated practices. This is what I call the elimination of deep-rooted evils.

The reform of state law-enforcement authorities is a prerequisite for regaining public trust. The National Intelligence Service must be transformed into an intelligence agency for the people. The organization will be overhauled so that it is no longer involved in domestic political affairs and concentrates solely on overseas intelligence gathering and activities related to North Korea. My commitment remains steadfast. I hope and request that the National Assembly will support this cause with the enactment of relevant laws.

The Prosecutors’ Office shall also be reformed into an organization that works for the people and the people alone. The public outcry for its transformation is as weighty as heaven. Reflecting this sentiment, the Ministry of Justice has come up with measures to establish an agency for the investigation of crime among senior government officials. If the relevant bill is passed, I, the President, and my relatives will be the subjects of any investigation of the newly installed agency. I look forward to working with the National Assembly so that the bill can be discussed and passed as soon as possible.

The people should never be deprived of opportunity by state authorities. Recently revealed corruption scandals involving employment in the public sector organizations vividly illustrate why our young people fall into despair. We shall not stand for any act by public institutions that undermine equal opportunity. A thorough investigation will be conducted to ascertain the overall situation of corrupt employment practices, and the structural problems that invite such practices will be rooted out by all means. A system will be put in place to hold any official involved in irregularities strictly accountable, as well as anyone who requests special consideration for recruitment. 

My Administration shall remain dedicated to ensuring the people are not oppressed by irregularities, corruption and unfair practices, be they at government agencies, in the public sector, or in any other sector of society. We shall establish innovative initiatives to create a just country in which foul play and unfair privileges are no longer tolerated. I urge the National Assembly to join in this effort. 

The Korean Peninsula is the place where the Korean people live and will continue to do so. It must be kept safe and peaceful, and making sure this happens is a responsibility vested in the President by the Constitution.

The new Administration was launched amidst the gravest security environment we have seen in a long time. The Government is working to stabilize the management of the current situation and, at the same time, ultimately ensure peace on the Korean Peninsula. From the start, my Administration has dealt with issues involving the Korean Peninsula according to firm and consistent principles. We shall continue to do so going forward.

Our top priority is to maintain peace on the Korean Peninsula. Thus, armed conflict must be avoided under any circumstance. No military action on the Korean Peninsula shall be taken without prior consent of the Republic of Korea.

The second order of business is to denuclearize the Korean Peninsula. The Joint Declaration on the Denuclearization of the Korean Peninsula, signed by both South and North Korea, makes it impossible to accept or acknowledge North Korea as a nuclear power. South Korea will not develop or possess nuclear arms, either.

Third is our primary role in resolving the inter-Korean issue. The destiny of the Korean nation must be determined by Koreans. The unfortunate past in which our destiny was determined against our will, such as colonial rule and national division, must never be allowed to recur.

Fourth is the peaceful resolution of the North Korean nuclear issue. Sanctions and pressure are the means to guide the North toward making the right choice and coming to the negotiating table. The United States and the whole international community also share these principles pursued by the Korean Government.

Fifth is a stern response to any North Korean provocation. To this end, we must retain overwhelming military superiority.  On the basis of the firm ROK-U.S. alliance, the Korean Government will also work proactively with the international community. 

Building on these principles, the Korean Government is making diverse efforts to solve issues related to the Korean Peninsula. I took the Presidential oath of office before the people and the Constitution, and accordingly I shall do everything in my power to protect our citizens and preserve peace on the Korean Peninsula.

No differences should exist between the Administration and the National Assembly, and no distinction should be made between the ruling and opposition parties with regard to the North Korean nuclear issue. When it comes to policies affecting the future of the Korean Peninsula, bipartisan cooperation is all I seek. 

Fellow Koreans and distinguished members of the National Assembly,

The Administration submitted to the National Assembly the 2018 budget proposal and a tax code revision plan. They have been designed in order to move forward on our people-centered economy initiative, support the everyday needs of the people, and enable a strong security posture.

Total expenditures in next year’s budget amount to 429 trillion won. This is a 7.1 percent rise over the current year, the highest annual increase since the global financial crisis.

This is the first government budget drawn up since the launch of the new Administration. It is our belief that fiscal spending should play a more proactive role in reviving the economy and improving people’s lives.

All necessary steps were taken to ensure that our nation’s fiscal health will not be impaired. Intensive restructuring of nonessential budgetary items helped us shed 11.5 trillion won in spending. A bill to revise the tax code was tendered to collect additional tax revenues of 5.5 trillion won. The debt-to-GDP ratio was adjusted to 39.6 percent, a similar level to this year.

When drawing up the budget plan and tax reform bill for next year, the focus was placed on job creation, the increase of household income, innovative growth, public safety and security. 

First, the budget for job creation has been markedly increased to 19.2 trillion won, an increase of 2.1 trillion won over this year`s amount. This is urgently needed for the people - young people in particular. Of late, our economy has shown signs of picking up steam. If the employment situation is improved, the economy will be able to gain more momentum. 

The budget has been planned so that the public sector can lead job creation and properly provide the people with essential services. The Government will additionally hire 30,000 public servants to provide services relevant for day-to-day living, including police officers, mailmen and labor supervisors, as well as 12,000 social service workers for childcare and the care of the elderly.    

Assistance will be also given for the creation of decent jobs in the private sector. If an SME employs three young people, the Government will provide wages to the third employee. Next year, the Government will increase the number of young people to be employed under this system, to reach a total of 20,000. Tax benefits have been increased for middle-market companies and for SMEs as an incentive to hire more employees. 

The Government has also enhanced assistance for improvement of job quality. If the budget bill is passed, SMEs that convert irregular workers to regular workers will benefit from tax breaks and a per capita subsidy for each conversion. The tax credit rate for SMEs that raise employees` wages will rise twofold. 

Second, the budget earmarked for the sake of raising the disposable income of the people has been greatly increased. This is to help people have sufficient financial resources to save or spend by reducing the burden from living expenses through increased basic income. Income growth for ordinary citizens constitutes the foundation of income-driven growth.  

The Government will increase the allowance for housing and education to ensure a basic livelihood. In connection with this, the "youth hope growth account program" has been newly launched for low-income young adults. 

The burden on households from medical expenses will be dramatically lowered, with state assistance increased commensurately. Assistance for catastrophic health expenditure, which has been so far confined to four major diseases, will be expanded to cover all illnesses while expanding facilities such as dementia care centers and convalescent centers in line with a system in which the Government takes responsibility for dementia patients. 

A child benefit system for those under 5 will be introduced to provide 100,000 won per month starting in July next year. I hope this new system will help alleviate some of the burden of raising children. 

Korea`s elderly poverty rate, which is the world`s highest, is a dishonorable reality. To improve the situation, the Government will increase the monthly basic pension to 250,000 won and also expand the number of recipients. The number of senior citizens who will receive employment support will rise to 514,000. 

The monthly pension for people with disabilities will also be raised to 250,000 won, and the number of jobs for such people will be increased to 16,000. 

Support for small business owners and micro SMEs has been expanded. A total of 2.9704 trillion won has been earmarked for job security so that the burden from the minimum wage hike will be alleviated and job opportunities will be maintained. Thirty percent of the employment insurance premium will be provided to small one-man business owners for two years. 

Holding decorated patriots and veterans in high regard is a state`s minimum duty. The monthly war veterans’ allowance and the allowance for those having given distinguished military service have both been increased by 80,000 won. As a result, war veterans` allowance will rise to 300,000 won from the current 220,000 won. The discount on medical expenses for war veterans will increase from 60 percent to 90 percent. Descendants of decorated independence activists, who have so far been exempted from such assistance, will be provided with up to 468,000 won to support their livelihoods. 

To support income-driven growth, the Government will pursue a revision of the tax bill. A tax revision bill has been submitted to the National Assembly with the aim of raising the income tax rate for super high-income earners and the corporate income tax rate for corporations with more than 200 billion won of taxable income per year. If passed, it is expected to further enhance assistance for low-income families, the middle class, micro-business owners and SMEs. It is desirable for the wealthy and conglomerates to pay more taxes; if they do, they will be held in greater respect by society. 

Third, innovative growth has been fully reflected in the budget plan to lay a new foundation for growth and create more quality jobs by properly responding to the Fourth Industrial Revolution and promoting startups. 

First of all, the Government will invest a total of 1.5 trillion won into the development of core convergence technologies in preparation for the Fourth Industrial Revolution. In particular, enhanced assistance will go to promote joint research between SMEs. Initial steps will be taken for intelligent digitalization, for instance, by providing assistance for ‘smart plants.’ 

Significantly enhanced assistance will be channeled into starting innovative businesses that can help find new growth engines and create quality jobs. Through the supplementary budget, additional financial resources of 800 billion won have been added to SME support funds. Next year, support for SMEs through both investment and loans will expanded, and the number of recipients of the package program aimed at encouraging those taking on the challenge of setting up a startup again will increase. Assistance will be newly provided to companies that encourage the establishment of in-house startups, and support for the founding of public and private joint startups and social enterprises will be dramatically increased.  

A total of 75 labs, for creative activities, will be established. The labs will serve as a key platform to help young people turn their creative ideas into reality.  In addition, the Government will develop innovative cities in local areas into innovative clusters. 

Fourth, the budget for the environment, safety and security has been increased to make a safe Republic of Korea. One basic obligation of a state is to protect the lives of the people and keep them safe. This is the starting point of building a properly functioning nation. 

In order to address environment-related issues that people are worried about, including fine dust, an increased number of decrepit diesel cars and trucks will be scrapped early. Assistance for electric vehicles has been increased.    

The Government will jointly shoulder responsibilities for the victims of toxic humidifier disinfectants and their families. A total of10 billion won has been earmarked to ensure victims and families receive damage relief without delay. As part of efforts to prevent the recurrence of similar incidents, 18.3 billion won has been allocated in the budget to improve the process of safety control with regard to biocides.

Food safety is also an important issue. Investigations into the safety of agricultural and marine products will be expanded to strengthen safety control. The plan also expands the budget to respond to the repeated occurrence of livestock diseases in the initial stage.  

The Government will strive to ease public concerns over natural disasters. As a countermeasure for annual droughts, different reservoirs will be connected by combining water systems. Assistance will be provided for the installation of state-of-the-art safety devices in buses and trucks for the prevention of accidents. 

The budget for national defense has been increased by 6.9 percent, the highest rise since 2009, in a bid to make our armed forces stronger and to equip them with self-reliant national defense capabilities. In particular, the budget for the enhancement of defense capabilities saw a marked 10.5 percent increase. To protect the people from the North Korean threat, the establishment of the three-pillar system will be completed at an early stage. On top of this, the salary of rank and file military personnel will be greatly increased; the salary of sergeants will rise to 406,000 from 216,000, for instance. This will improve their welfare and enhance morale. 

Fellow citizens and distinguished members of the National Assembly, 

When the nation does its fair share, the people can live without losing their hope. The nation has to win the confidence of the public in its ability to protect them in times of need. This is the reason why a nation exists. 

To make sure that a citizen can lead a decent life in the Republic of Korea, it is necessary for all the budgets for national defense, safety, job creation, childcare and starting a business to be combined to play a supporting role. Each element of the budget plan is crucial. 

The budget plan is not simply about numbers. It represents the policy direction of the Government and also reflects values we are pursuing. The budget plan this time has been drawn up after much thought to address pending structural problems of our economy and society. 

What is also meaningful in formulating the budget plan this time is that citizen participatory budgeting has been conducted on a trial basis. A public survey of around 1,000 people has been carried out to identify useful projects. Six projects expected to total 50 billion won have been included in the budget plan. They include a project for safe rental units for women, for which 35.6 billion won has been earmarked, and a project for home-working infrastructure to the amount of 2 billion won. Finance information disclosure will be expanded, and the citizen participatory budgeting will be introduced in earnest, thus enhancing public participation in the formulation of budget plans.  

Many of the projects that had also been promised by opposition party candidates during the last presidential campaign were reflected in the budget plan. They include measures for young adults and irregular workers, as well as the introduction of child benefit, increases in maternity leave, the building of more of national and public daycare centers and the expansion of health insurance coverage. 

Concerning the administrative agenda my Administration is pushing for, common pledges made during the last presidential election and security issues, I request the National Assembly`s understanding and active cooperation in the interest of a larger cause. 

Fellow citizens and distinguished members of the National Assembly, 

Now is the time for us to answer in a faithful manner to the people`s question as to what the purpose of a nation truly is. Our answer has to be that we will deliver them a properly functioning and just nation. We have to make a promise that we will set right all areas, including politics, the economy, society and culture. For the people who have so far had to shoulder all responsibilities on their own, the nation now has to come forward to deal with some of those responsibilities on their behalf. 

There are no ruling and opposition parties when it comes to matters of security and the everyday lives of the people. I once again call for the formation of a permanent consultative body on state affairs composed of the ruling and opposition parties and the Government. 

To carry out constitutional reform is to uphold the will of the people. It is necessary to expand the people`s basic rights in line with the changing times. For the balanced development of the capital area and provinces, decentralization and autonomy have to be enhanced. 

Constitutional reform must be by and for the people, shaped in substance and procedure by the participation and wishes of the Korean people and enacted with the aim of ensuring popular sovereignty and political reform.  

I believe it would be best to hold a referendum on constitutional reform next year during local elections. If we delay beyond that point, it will be difficult to establish a strong base of support for reform. I ask that the National Assembly keep this timeline in mind in its deliberations. 

In addition to constitutional reform, I hope the National Assembly is also able to reach a bipartisan consensus on electoral reorganization, so that Korea’s electoral system can be improved to faithfully reflect the wishes of voters. I strongly expect that reforms in both of these areas will lay the groundwork for national renewal, and my Administration will do its part as well. 

Fellow Koreans, Mr. Speaker and members of the National Assembly, 

The process of public deliberation on the No. 5 and 6 nuclear reactors at Shin Kori nuclear power plant ended on October 20. The public committee demonstrated the power of consensus-building and mutual respect in their readiness to listen and consider opposing arguments. They showed us that dialogue and broad consensus are fully within our reach. I could not be prouder.

The Korean people have always taken the initiative to bring about political change. Even now, they are calling for political reform. They want politics to be a vehicle of change in their lives, and they are taking action toward this goal. It is time for our politicians to honor and fulfill the people’s wishes. It is time to move forward and cooperate to live up to the people’s expectations. 

Today marks 100 days until the opening of the PyeongChang 2018 Olympic and Paralympic Winter Games. Ensuring the games’ success is a task of national importance. Today, we will also see the Olympic torch that departed from Greece arrive in Korea. The PyeongChang Olympic and Paralympic Games are an unparalleled opportunity to establish peace on the Korean Peninsula. Your interest and support will be invaluable.

I am confident that all of you will be able to partner with one another to ensure that this country is one that exists for the people, where our shared sense of basic civility and justice makes us safer, and our willingness to make concessions and compromises, and support one another and show mutual concern makes us better people. It is my sincere hope that the hopes of the Korean people will come to fruition in the hall of this great assembly. 

Thank you very much.