[EDITORIALS]Skeptical Eye on More Budget FundsThe government and the ruling Millennium Democratic Party on Monday produced a revised supplementary budget plan with detail spending plans for last year's fiscal surplus of more than 5 trillion won ($3.8 billion). According to the proposed plan, the central government will provide 3.5 trillion won to local autonomous governments and spend 1.2 trillion won to help the national medical insurance and medicare system, 40 billion won to finance unemployment programs for youth and 28 billion to help drought-hit farmers. If the new budget proposal passes the National Assembly, this year's budget will be 10.9 percent larger than last years.
That is a more than double the growth of the overall economy, expected to be about 4 percent this year, and is the opposite of last year's government promises of austerity.
The government has asked for a supplementary budget every year since 1996, but if extra spending is actually necessary, it has no choice but to do so. We wonder, however, if more spending is really required now.
We question the additional grants to local governments. Under current law, the government could include the grants in next year's budget. Seoul is already suspected of pork-barrel policies, including a series of tax reductions and eased regulations on the development of "greenbelt" areas before the presidential and local government elections. So by providing more economy-boosting money to local governments now, rather than waiting until next year, it is intensifying such suspicions.
Although the national health insurance system is in serious financial trouble, there has not been sufficient discussions about how it failed and how to raise funds to refinance it. Another argument against a supplementary budget is that the jobless rate is falling, making it less imperative to raise funds for unemployment payments. Finally, some 300 billion won is still in the government's emergency funds for natural disasters. Thus, we believe, by far the best use of last year's fiscal surplus would be to repay some of our national debt.
Most of the surplus in last year's budget came from the issuance of government bonds worth 3.6 trillion won. This is by itself a good reason for paying back the unnecessary loans.
The government should also stop its plans to ask for an extra budget right now in order to overcome suspicions that it hurried to do so before the passage of a law to strictly regulate the conditions under which such a budget can be sought. Even if we were to agree with the government's case for the refinancing of the health insurance system and disaster fund, we believe that grants to regional governments should still be excluded from the extra budget.
We also take issue with the poor planning that seems to be a consistent part of budget plans prepared by the government and passed by the Assembly. The government's need for more money every year since 1996 may be the result of an easy-going attitude. Why work hard on a budget, after all, if it is easy to get more money in a supplement.
This year's budget proposals for pork-barrel projects were not slashed nearly enough, while emergency funds and interest payments shrank drastically. That is why the government began crying for a budget supplement immediately after the original budget was approved. The government should stop showing such a lax attitude toward drawing up and deliberation of budget in order to end the vicious circle of supplementary budgets.