Proposed budget for 2020 sees 6.2% increaseNext year’s budget is set at almost 500 trillion won ($421.9 billion), a 6.2 percent increase from this year’s record level, with increased spending on welfare, jobs and defense.
Spending on the environment will go up 5.4 percent, partly to tackle fine dust pollution.
According to the Ministry of Economy and Finance on Friday, a budget proposal for next year amounted to 498.7 trillion won, 29.1 trillion won more than this year’s.
Since the Moon Jae-in government took power in 2017, the national budget has increased more than 6 percent for each of the past two years.
Under the previous administration, the budget increased 6 percent in 2015, 4.1 percent in 2016 and 3 percent in 2017.
Starting with a 6 percent increase for the budget in 2018, the Moon administration further expanded the budget by 6.8 percent this year.
In a statement, the ministry said next year’s budget is meant to strengthen the foundation for an inclusive country while boosting innovation in the economy.
The government is expanding the social safety net and creating jobs. For next year, the government is spending 181.7 trillion won on the social safety net including subsidies for households living on minimum incomes as well as job support programs. This is a 12.9 percent increase.
The budget for welfare and employment takes up the largest portion of next year’s budget at 36 percent and is seeing the sharpest increase in spending.
President Moon has emphasized welfare and jobs since his presidential campaign of 2017.
Under Moon, the welfare and job budget has enjoyed double-digit annual growth. In 2018, the budget expanded 11.7 percent, while for this year it grew 11.3 percent to 161 trillion won, which is an-all time record.
The area that saw the second sharpest increase was research and development.
The government proposed a 22.4 trillion won budget for R&D to boost Korea’s innovation. That is a 9.1 percent increase compared to this year’s spending. The government said the R&D budget will be used for what it calls “four platforms” that intersect with “eight leading industries” and “three core industries.”
The four platforms are the hydrogen economy, data, artificial intelligence and 5G connectivity. The eight leading industries include drones, new energy industries, smart factories, smart cities and smart farms and the three core industries are future cars, non-memory computer chips and biohealth.
However, while the government said it was focusing on revitalizing regional economies, the budget for industries, SMEs and energy was shaved nearly 2 percent to 18.4 trillion won.
The government also cut the budget for infrastructure by 8.6 percent to 18.1 trillion won while claiming it will enhance the living environment and improve outdated infrastructure.
One area that saw a noticeable increase was the environment, for which the government raised the budget 5.4 percent to 7.8 trillion won. This is more aggressive than the 0.2 percent bump the environment budget enjoyed this year.
There have been increasing concerns over fine dust pollution in recent years.
The government said it increased the budget to tackle fine dust.
The government also raised the defense budget 8.2 percent to 50.4 trillion won, the sharpest increase in 11 years.
The aggressive budget expansion was signaled by the government in advance as President Moon Jae-in called for more aggressive spending to bolster the weakening economy.
In May, during a government fiscal strategy meeting, Moon asked what the justification was for keeping the national debt to GDP ratio at 40 percent.
BY LEE HO-JEONG [email@example.com]
More in Economy
It's a good time to give away residences
Unemployment line adds insult to injury for the jobless
Number of part-time workers hits record high
Closing for good
Those who didn't buy are singing the real estate blues