Seoul: The government on Tuesday approved and submitted to the National Assembly a supplementary budget totaling 26.2 trillion won ($17.2 billion), the second extra budget under the Lee Jae Myung administration, aimed at mitigating the economic shock from the Middle East war.

According to Yonhap News Agency, the plan allocates 4.8 trillion won to provide relief to the tune of 100,000 to 600,000 won per person to households in the bottom 70 percent of income earners, covering 32.56 million people, to combat rising oil prices. It also earmarks 5.1 trillion won to ease fuel and transportation costs, including 4.2 trillion won to compensate for losses from a cap on oil prices. Additional spending includes 2.8 trillion won for stabilizing livelihoods and 2.6 trillion won to minimize industrial damage and strengthen supply chains. The ruling and opposition parties plan to pass the bill at a plenary session on April 10.

Given the strain on households from the so-called triple burden of high oil prices, a weak currency, and inflation, there is some justification for the ruling party's push to move quickly on what it calls a "war budget." Supplementary budgets can be effective when deployed at the right time and in the right place. However, an excessive focus on speed risks undermining their effectiveness.

The size of the package exceeds earlier estimates by 5 trillion to 10 trillion won. The scope of cash-based support has also expanded. With 70 percent of the population eligible for relief payments, critics argue that the program approaches a near-universal cash distribution. If politically motivated or poorly designed projects are included without sufficient scrutiny, the result could be wasteful spending and accusations that the budget is intended to influence voters ahead of the June local elections.

The potential side effects of such a large budget must also be considered. The government has emphasized that the spending will rely on higher-than-expected tax revenue rather than additional bond issuance. Even so, the supplementary budget would increase this year's total budget by 11.8 percent compared with last year. Using excess revenue for immediate spending, rather than saving it or repaying deficit-financing bonds, could reduce fiscal flexibility.

If additional spending becomes necessary in the future, the government may have little choice but to take on more debt. Cash-based support could also add upward pressure on prices and contribute to rising interest rates. Government bond yields have already climbed, pushing the upper range of mortgage rates above 7 percent. If this trend continues, the financial burden on households, small business owners, and the self-employed is likely to grow.