South Korea Parties Finalize 2026 Budget Deal Ahead of Dec. 2 Assembly Vote
Updated (3 articles)
Budget Amount and Legal Deadline: The National Assembly must approve a 2026 budget of 728 trillion won (≈ US$498 billion) by the legal deadline of Dec 2, a requirement repeatedly missed in prior years[2]. The deadline intensified pressure on both the Democratic Party (DP) and the People Power Party (PPP) to reach a compromise[3]. Inflation concerns and fiscal targets remain central to the budget’s macro‑economic framework[1].
Party Leaders and Floor‑Leader Negotiations: DP leader Jung Chung‑rae pledged a timely passage of President Lee Jae Myung’s first budget, while PPP leader Kim Do‑eup warned against corporate‑tax hikes that could harm businesses[2]. Floor leaders Rep. Kim Byung‑kee (DP) and Rep. Song Eon‑seog (PPP) met on Dec 1, following a Nov 30 session, to narrow differences on policy funds and tax items[2][3]. Their talks culminated in the announcement of a budget deal on Dec 1, just before the Dec 2 deadline[1].
Core Disputed Items: Both parties contested local gift‑certificate programs, policy‑fund allocations, special activity expenses for the presidential office, and education‑related taxes[2]. The DP seeks to reverse corporate‑tax cuts introduced under former President Yoon Suk Yeol, whereas the PPP argues that raising taxes would burden SMEs and exacerbate high inflation[2][3]. These fiscal disagreements formed the bulk of the negotiation impasse.
Parliamentary Probe into Daejang‑dong Real‑Estate Case: joint demand emerged for a parliamentary inquiry into the prosecution’s decision not to appeal a lower‑court ruling on the 2015 Daejang‑dong development scandal in Seongnam[3]. The case alleges that asset‑management firms such as Hwacheon Daeyu profited while Lee Jae‑Myung was mayor, raising questions about prosecutorial conduct[3]. Both DP and PPP view the probe as a leverage point in the budget talks.
Final Agreement Reached After Deadlock: After days of stalled negotiations, Yonhap reported that the rival parties announced a budget deal on Dec 1, clearing the path for a vote before the Dec 2 deadline[1]. Earlier reports on Nov 30 and Dec 1 described ongoing talks without a settlement, highlighting the rapid shift from deadlock to agreement[3][2]. The deal is expected to incorporate compromises on the contested items, though detailed terms remain undisclosed.
Sources
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1.
Yonhap: South Korea's Rival Parties Reach 2026 Budget Deal Ahead of Assembly Vote: Reports the final agreement reached on Dec 1, mentions President Lee’s call for stronger penalties after a data breach and Bank of Korea’s inflation outlook.
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2.
Yonhap: South Korea's Ruling and Opposition Parties Engage in Final Budget Negotiations Ahead of Dec. 2 Deadline: Details the 728 trillion‑won budget, disputed items, corporate‑tax conflict, and floor‑leader talks on Dec 1, emphasizing the looming deadline.
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3.
Yonhap: South Korea’s ruling and opposition parties resume budget talks, probe into corruption case: Describes the Nov 30 negotiations, the same disputed fiscal issues, and the joint push for a Daejang‑dong probe, noting no agreement at that stage.
Timeline
2015 – The Daejang‑dong real‑estate development case in Seongnam, involving private asset‑management firms such as Hwacheon Daeyu profiting while Lee Jae‑Myung served as mayor, becomes the focus of a parliamentary inquiry into the prosecution’s decision not to appeal a lower‑court ruling [3].
2022‑2023 – Former President Yoon Suk Yeol enacts corporate‑tax cuts that later become a flashpoint in 2025 budget negotiations, with the Democratic Party seeking reversal and the People Power Party opposing any increase [2][3].
2025 – A major data breach at e‑commerce giant Coupang exploits the company’s electronic signature key; President Lee Jae Myung urges stronger penalties and punitive damages, while Second Vice Minister Ryu Je‑myung confirms the breach’s duration and scope [1].
Early Dec 2025 – Bank of Korea Deputy Governor Kim Woong pledges to monitor inflation closely and projects a gradual decline toward the 2 percent target following the latest consumer‑price data [1].
Nov 30, 2025 – Ruling Democratic Party and opposition People Power Party officials resume budget talks at the National Assembly, discussing the 2026 budget, corporate‑tax dispute, and a parliamentary probe into the Daejang‑dong case, but leave without an agreement [3].
Dec 1, 2025 – DP floor leader Kim Byung‑kee and PPP floor leader Song Eon‑seog meet at the National Assembly to narrow differences on policy funds, local gift‑certificate programs, presidential office expenses, and taxes ahead of the Dec 2 deadline [2].
Dec 1, 2025 – DP leader Jung Chung‑rae pledges to pass the first budget of Lee Jae Myung’s administration on time, while PPP’s Kim Do‑eup warns that a corporate‑tax hike would hurt businesses amid high inflation and interest rates [2].
Dec 1, 2025 – Rival parties reach a 2026 budget deal worth 728 trillion won (US$498 billion) ahead of the Assembly vote, covering contentious items such as local gift‑certificate programs, policy funds, presidential‑office special activity expenses, and education taxes [1].
Dec 2, 2025 – The National Assembly must approve the 2026 budget of 728 trillion won by the legal deadline, a deadline that has been missed repeatedly in the past [2].