Good part of the supplementary budget is spentThe government announced that it will execute 70 percent of a recently passed supplementary budget before the Chuseok harvest festival to maximize its impact on boosting the local economy and creating new jobs.
Of the total 11 trillion won ($9.9 billion) supplementary budget, 8.6 trillion won is allocated to the central government, and the Ministry of Strategy and Finance announced Monday - two days before the start of the holiday - that it will use 71 percent, or nearly 6.1 trillion won, before the holiday.
The government has stressed that delay would diminish the impact of the budget on an economy with declining exports and weak domestic demand after temporary consumption tax cuts on vehicles ended in June.
The government sent the supplementary budget to the National Assembly on July 26, but it was held hostage due to political bickering and was only passed on Sept. 2.
The government pledged that the additional spending will add 0.2 percentage points to Korea’s economic growth for this year - if it was executed at the right time.
“Some of the supplementary budget has already been given out to local governments and they will be able to use the money to strengthen their regional economies, creating new jobs and dealing with ongoing corporate restructuring,” said Kang Joon-mo, a director at the Finance Ministry. “We only have four more months to use the budget and we plan to spend where it is needed and at the earliest to maximize its impact on the economy.”
The government said it will use the supplementary budget to create a 1.6 trillion won fund to help companies restructure and minimize the negative impact of the restructuring.
According to the Finance Ministry, some of the money has already been spent and the impact will come this week at the earliest.
A total of 5 billion won, some of which has already been spent, will be executed before Chuseok and it will help about 40,000 Koreans find new jobs, the Finance Ministry said. Among them, some 20,000 of them will be young Koreans and another 15,000 beneficiaries are those who are considered socially vulnerable, including women and those in low-income households.
“The supplementary budget will help the slow economy and will minimize the fall in the second half of this year,” said Park Tae-keun, a fixed income analyst at Samsung Securities. “The earlier is the better for the supplementary budget execution and I believe it will help the economy as it is supposed to.”
According to the government, some of the budget will be used to support those in the fishery industry that were hit by abnormally hot weather as well.
Some 2.8 billion won will go to fishermen residing in South Chungcheong and South Gyeongsang before Chuseok, and another 8.2 billion will be used for sewer maintenance in rural regions that is planned to be carried out by Ministry of Environment.
The government said the maintenance business will also create jobs and boost local economies during the holiday.
BY KIM YOUNG-NAM [firstname.lastname@example.org]