Local gov’t heads threaten ‘default’

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Local gov’t heads threaten ‘default’

An association of regional office heads declared on Thursday a “default” on welfare policies for next year and demanded that the central government step in with financial aid, citing heavy budgetary constraints due to an increasing number of welfare programs in recent years.

In a statement issued on Thursday, 226 city mayors, district office heads and county chiefs announced that they will no longer be able to back basic pension plans and free day care service for preschool-aged children without government assistance. “We have so far earmarked budgets [despite our serious financial stress] because basic pension benefits and free day care service are invaluable to our residents. We make it clear that we are no longer able to do that now,” it read.

One city mayor from the association said that unless the government responds to the association’s demands for help, it would convene an emergency meeting before March and carry out collective action, hinting at the possibility of an all-out default on free day care service and basic pensions.

The central government was not swayed by the threat, however, saying it had already increased its financial aid for free day care service by 15 percent last year.

“The free day care program must be continued [without additional government assistance],” said Jang Ho-yeon, the finance management director at the Ministry of Health and Welfare.

The government also claimed that municipal offices are financially capable of funding the basic pension program without its help.

Local governments’ combined debt surpassed 100 trillion won ($91.5 billion) for the first time in 2012, and more than half of local government offices - 127 out of 244 - say they are unable to pay their employees without support from the central government.

The collective warning on Thursday came three days after South Gyeongsang Gov. Hong Joon-pyo said that the provincial government would no longer fund the free school meal program next year and that regional governments could not continue the “free welfare party” when many municipal offices couldn’t even afford to pay their own employees.

Since 2011, a number of free education and welfare policies have been touted by aspiring politicians and city officials.

The initial triumph, however, didn’t last long, and the central government has already partially withdrawn plans to provide financial support to municipal governments in carrying out those new policies. Earlier this year, the Ministry of Education announced it would no longer back the free day care programs for preschool-aged children. It left it up to the regional education offices to finance the program.

With growing budgetary shortages facing municipal governments, conservatives have taken on free school lunch programs, calling on education office chiefs to slash funds necessary to continue the program. Liberals, on the other hand, demand the central government step in to aid the free day care service for toddlers aged 3 to 5.

BY KIM SUNG-TAK, KANG JIN-KYU [jkkang2@joongang.co.kr]

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