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Original budget to decline 3.3% for 2010 vs. 2009

Even when supplemental funds are subtracted, spending growth small  PLAY AUDIO

Sept 29,2009
The national budget for next year will be 3.3 percent less than this year’s, the Ministry of Strategy and Finance said yesterday.

The ministry said the 2010 budget has been set at 291.8 trillion won ($244.3 billion), compared to this year’s 301.8 trillion won, a figure that includes a 17.3 trillion won supplementary budget passed by the National Assembly in April.

Discounting the supplemental budget from last year’s numbers, the proposed budget is 2.5 percent higher than last year’s 284.5 trillion won outlay. Still, that represents the lowest on-year growth since the Asian Financial Crisis.

Confirmation of the 2010 budget came as the government was under mounting pressure over the increasing budget deficits as the result of extra spending and tax breaks enacted to counter the economic crisis.

The ministry, however, said the new budget is not the beginning of the end of expansionary financial policies. It said much of the budget spending for next year is still engineered to boost the economy.

“A self-supporting recovery in the private sector is yet to be seen and improvement in job growth is not expected to be easy,” said Finance Minister Yoon Jeung-hyun during a media briefing. “But fiscal soundness that was weakened in the process of overcoming the economic crisis should also be carefully managed.”

Specifically, the budget for research and development and the budget for welfare, labor and health will rise 10.5 percent and 8.6 percent, respectively, from this year’s original budget, the ministry said. For the two sectors, which the government sees as essential to boost the private sector, 13.6 trillion won and 81.0 trillion won were set aside, each, for next year.

To improve the job market, the temporary job creation project in the public sector will be extended to next year but on a reduced scale. A total of 3.5 trillion won has been earmarked for the Hope Employment Project next year with the number of the beneficiaries estimated to be 550,000. This year, 7.4 trillion won, including outlays in the supplemental budget, was set aside for the project for 800,000 people.

The budget for foreign affairs and inter-Korean affairs also will increase 14.7 percent from this year’s original budget. The budget for culture, sports and tourism also will rise 7.8 percent.

However, the budget for social overhead capital, except for the four-river restoration project, was set at 21.3 trillion won, 2.9 trillion won less than the 2009 original budget.

The budget for small- and mid-sized companies and education also dropped 10.9 percent and 1.2 percent from this year, respectively. The wage level for public officials was frozen at this year’s level.


By Moon Gwang-lip [joe@joongang.co.kr]



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