Budget gets tweaked to find jobs

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Budget gets tweaked to find jobs

The Ministry of Strategy and Finance ordered government branches to alter their budget proposal for 2018 to try to create more jobs.

This is the first time that such orders have been made due to the unusual circumstances of a new government taking over in the middle of the year.

Creating 810,000 public sector jobs was the main promise made by President Moon Jae-in in his presidential campaign. The budget will also be altered to tackle the air pollution problem in Seoul and other big Korean cities.

“Government branches will state how many jobs they can create or what kind of impact they can make on the labor market in their budget proposals,” said Choi Han-kyung, a director at the Finance Ministry, Friday. “We will have them come up with budget plans that will focus on the new administration’s policy goals such as creating jobs, solving the low birthrate problem and reducing air pollution.”

The key goal of Friday’s announcement was to encourage government departments to spend less next year. Throughout his campaign, Moon said he would need an additional 178 trillion won ($158 billion) to spend in order to complete his policy goals in five years. He added that 62.9 percent of that amount, or 112 trillion won, would be found in cost savings.

The Finance Ministry said all government departments should cut 10 percent of their discretionary spending. In the 400.7 trillion won budget for this year, mandatory spending accounts for 195.6 trillion won and discretionary spending 205 trillion won.

“We will have all government branches review their plans from scratch to cut 10 percent of discretionary spending for next year,” said Choi at the Finance Ministry. “We will also work on cost savings for mandatory spending by improving productivity in social security and health care sectors.”

The mandatory part of the budget is spent on programs required by existing laws such as health care and the national pension system. Discretionary spending, on the other hand, is more flexible.

Even though the government’s overall budget is expected to drop compared to this year, it seems the budget for the labor market will remain high.

According to the Finance Ministry, the budget for job creation rose 7.9 percent year on year from 15.8 trillion won in 2016 to 17.1 trillion won this year.

The Finance Ministry released budget guidelines on March 31. Since the additional guidelines were announced on Friday, the deadline for proposal submissions will be moved from May 26 to May 31. The Finance Ministry will review the proposals and submit them to the National Assembly by September 1.

BY KIM YOUNG-NAM [kim.youngnam@joongang.co.kr]
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