The budget war begins anew

This year, the annual “budget war” is heating up earlier than it did in 2008.

The creation of a budget for 2010 will be a hard-fought battle, the biggest of all time. Most prominently, budgetary limits will shrink more than this year. A supplementary budget of 28.4 trillion won was approved this year to shore up the economy, but it will be difficult to do the same next year considering budget deficits. The Ministry of Strategy and Finance has revealed that the budget for next year will increase by 4.9 percent compared to this year, but include the supplementary spending and it’s actually a record 1.1 percent decrease.

On the other hand, huge amounts of money will be spent on large national projects, such as the restoration of the four major rivers and the construction of administrative cities. In reaction, the government cannot help but make cuts in other areas, with pressure for budget reductions ever increasing. In addition, the heads of local governments or members of local councils, eager to be re-elected in May, are competing desperately to win budget funds.

What the budget authority should be most cautious against is the collapse of its principles. Ministries, offices and local governments have been shamelessly indulged in every budget in recent years. To stop this, the authority must establish rigid guidelines.

First of all, it should bear in mind that Lee Myung-bak ran for office based on a “small government” pledge. At the beginning of his regime, our economy was driven by fear of a meltdown. However, now he should return to his prudent, frugal principles. To do so, investment in new projects should be restrained as much as possible. Any project mentioned as a repetitive time-waster should be promptly suspended. Where inefficient implementation of the budget and misuse or abuse is found, the perpetrators should be put at a disadvantage the next time a budget is devised.

We expect the budget authority to take drastic measures. It should apply the scalpel of sharp criticism to state-funded projects, inquiring into their economic effects, especially concentrating its attention upon the practice of dividing the spoils among the political community. This was an inveterate disease during the economic meltdown last year.

In particular, they should realize that the Grand National Party is the culprit that made sure the State Finance Act passed three years ago. We recall that, except in cases of war, natural disasters and mass unemployment, rigid restrictions have been imposed upon the compilation of the supplementary budget. The budget authority should not take a single step backward.