Finance minister touts supplementary budget

Finance Minister Kim Dong-yeon, fifth from left, and Democratic Party floor leader Rep. Woo Won-shik, sixth from left, pose during a meeting to discuss youth employment at the National Assembly in Yeouido, western Seoul, on Monday. [YONHAP]

Finance Minister Kim Dong-yeon said the government is working on new measures to support regions that are expected to hit hard by restructuring of industries and layoffs.

“Some of the local economies are facing additional difficulties such as shrinking job opportunities due to shipping and shipbuilding restructuring,” the Finance Minister said Monday in a meeting with lawmakers of the ruling Democratic Party to discuss a 4 trillion won ($3.8 billion) supplementary budget. “We have already announced the first batch of measures to resolve these issues [in mid March] and are currently working on additional measures.”

Kim said the additional measures will be comprehensive, including swift allocation of funds for regions facing major industrial crises as well as tax benefits.

It will also come up with plans to attract corporate investments to those regions as well as ideas to boost their tourism industries.

A study by the Statistics Korea released Monday showed that the Gyeongsang regions including Geoje has suffered losses of jobs in the shipbuilding industry since the second half of 2016.

The study showed that as of October 2017, the unemployment rate in Geoje was 6.6 percent, a significant increase from 2.6 percent in October 2016. In just one year, 12,900 workers lost their jobs in Geoje alone.

Gunsan, North Jeolla, where a GM Korea plant is being phased out, has seen its unemployment rate rise to 2.5 percent as of October 2017 compared to 1.5 percent a year ago.

During that period, 6,400 people lost their jobs. If GM Korea fails to reach an agreement with its union and the company files for bankruptcy - as warned by GM executive vice president Barry Engle - the Gunsan economy could face major losses.

Finance Minister Kim on Monday particularly stressed that youth unemployment should be affected by measures announced in March including payments to job applicants who apply for positions at small or medium-sized enterprises. The government is trying to lower the youth unemployment rate from the current 9 percent to 8 percent.

“We plan on applying every policy measure that is possible including tax benefits for companies hiring young applicants, regulatory reform and the supplementary budget,” Kim said.

“Timing is very important for policies including tax reforms,” Kim said. “We can execute these policies quickly [only] when the National Assembly approves the supplementary budget as early as possible.”

He said the government plans to submit a detailed plan for the supplementary budget to the National Assembly by the end of this week.

The Democratic Party expressed its full support.

A week ago the Finance Minister met with lawmakers of opposition parties to describe the supplementary budget but got a cold response. Those politicians said it was too early to come up with a supplementary budget.

BY LEE HO-JEONG [lee.hojeong@joogang.co.kr]