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Welfare-heavy budget is passed

The National Assembly missed its year-end deadline of passing a budget for 2014 but finally voted one through yesterday morning after overnight, marathon negotiations on several controversial bills, including one to loosen a regulation on foreign investment.

It was the second year in a row that the budget wasn’t passed by midnight New Year’s Eve. The legal deadline for passing the 2014 budget was Dec. 2.

At a plenary session held at 5:15 a.m., the assemblymen passed a 355.8 trillion won ($339 billion) state budget bill for this year, along with 40 other bills.

The size of the state budget was reduced by about 1.8 trillion won from the original bill and represented a 2 percent increase over the 2013 budget. The biggest increase came in expanded welfare for child care, education and underprivileged people, a key pledge by President Park Geun-hye during her election campaign in 2012.

The budget for measures to encourage couples to have and raise children was increased by 252 billion won from the original government proposal to 3.3 trillion won, as part of the government’s effort to boost Korea’s low birth rate.

A new budget for private day care centers to hire staff was set at 30.4 billion won. Money to run after-school classes in local schools, which are needed by families in which both parents work or for single mothers, was set at 100.8 billion won.

The budget for the Cyber Warfare Command of the Army, which was accused of running an online smear campaign in favor of Park during the 2012 presidential race, was shaved from 1.7 billion won, which the government proposed, to 900 million won.

The budget for the National Intelligence Service, the nation’s top spy agency, was also reportedly reduced, the assemblymen said, although the exact amount was not revealed. The NIS was also found to have run a pro-Park smear campaign during the 2012 presidential race.

The defense budget was increased by 4 percent to 35.7 trillion won.

But several key businesses of the Ministry of National Defense lost government subsidiaries in the new budget. The government’s proposed budget for the next-generation fighter jet project, dubbed the F-X Project, was cut in half to 366 billion won, and the procurement program for new long-range anti-submarine torpedoes was decreased by 10 billion won to 29 billion won.

The lawmakers failed to meet their midnight deadline mainly due to disputes over a controversial bill aimed at easing a restriction on foreign investment.

The ruling and opposition lawmakers reached a dramatic consensus to pass a bill on reforming the NIS at 8 a.m. on Dec. 31, which was aimed at preventing the spy agency from intervening in domestic politics again. That seemed to be the break in the logjam for all the other bills, including the budget.

But around 3 p.m., some hard-line members of the opposition Democratic Party argued that the foreign investment bill was meant to benefit conglomerates. They fought over the bill for four hours, until 7 p.m.

DP Chairman Kim Han-gill struggled to persuade the hard-liners and they finally agreed to pass the bill, but they demanded one condition on an entirely separate issue: passing a new law within the next two months to hire a special prosecutor to investigate the scandal-ridden prosecution.

The ruling party opposed the idea but finally relented.

The assemblymen finally held a plenary session at 5 a.m. and passed the bills en masse.

Still, lawmakers faced criticism for some assemblymen adding social infrastructure projects for their own constituencies.

The so-called “note budget” is a practice in which a lawmaker sends notes or text messages to members of the Assembly’s budget committee asking them to increase the budget for their own constituencies.

BY KIM HEE-JIN, KANG TAE-HWA [heejin@joongang.co.kr ]