Gov’t bemoans additional budget delay
“If the bill does not gain a pass in May, it could get postponed…possibly to August because of political events scheduled [in the upcoming months],” said Kim Dong-yeon, the minister of strategy and finance, on Wednesday during a meeting with local reporters in the government complex in Sejong.
A supplementary budget is an additional financial plan proposed by the government to address urgent issues in the country. It requires approval from lawmakers before it can go into effect.
The Ministry of Strategy and Finance submitted the 3.9 trillion won ($3.6 billion) extra budget bill on April 5 to provide aid to regions hit hard by mass industry layoffs and to stimulate the job market for young people.
But with political events such as the U.S.-North Korea summit and the general election scheduled over the next two months, it’s likely that the proposal will end up being tabled in the coming weeks.
The government tried to get this year’s plan passed quickly, but the plan fell apart as political parties struggled to find middle ground on a number of other agenda items such as a proposed amendment to the Constitution and the so-called “Druking” scandal. Government officials argue that the longer the budget sits in the National Assembly, the more difficult it will be for the public to benefit from the plan.
According to the Finance Ministry on Thursday, as much as 47 percent of laborers in Gunsan, North Jeolla, working in manufacturing companies are on the verge of losing their jobs. GM Korea’s plant there also suspended its operation in February due to heavy losses. The clock is ticking for the workers because the company said the plant will be shut down completely sometime this month.
Although an official from the ministry could not provide information on how much money was going to be allocated to Gunsan in May, he said planned measures such as financial aid and job training for the workers is expected to be delayed.
“An extra budget bill is all about timing, being able to channel the resources for urgent issues in a timely manner to minimize the cost,” the official said. “The longer we wait, the higher the cost will be to address the same issues.”
Out of the 3.9 trillion won, the Finance Ministry allocated 2.9 trillion to address unemployment among young Koreans. From that 2.9 trillion won, 1.7 trillion won was assigned to provide immediate financial support in the form of wages and loans with low interest for housing.
Another official said the government planned to inject the cash in May and expected more than 100,000 young Koreans to benefit from the plan.
“Because we set eight months as the duration of spending, about half of the total amount would become less effective [than it would have been if executed in May],” said the finance minister, although he added that the exact amount that would become useless is unclear. Last time it took more than 100 days for an extra budget bill to pass was in 2000, when it took 106 days.
Critiques of the proposal, however, said the plan does not offer a long-term solution to the mentioned issues, even if it had gone into effect immediately.
“Creating jobs temporarily does not have a significant meaning,” Kwon Hyuk, professor of law at Pusan National University, told the JoongAng Ilbo. “The government needs a macroscopic and long-term roadmap to improve the wage system and foster industries that could create new jobs.”
Other critiques also pointed out that the extra budget is too small. With the number of unemployed people standing at 1.26 million in March, the third straight month that the figure has stayed above one million, criticism of the government’s current direction is growing louder.
Still, some experts said the country needs a government-level initiative to address the economic issues.
“Putting aside the politics, [the proposal needs to be passed in a speedy manner because] it could help with issues such as the severe level of unemployment among youths and declining exports,” said Kim Jung-sik, professor of economics at Yonsei University.
BY CHOI HYUNG-JO [email@example.com]
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