Don’t touch my footprint

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Don’t touch my footprint

President Moon Jae-in in a cabinet meeting claimed the government enhanced the budget to aid merchants and strengthen quarantine and medical resources next year while reducing debt issuance to improve fiscal health. His comment suggests better fiscal management, but it is not true.

The budget for next year has increased 8.9 percent to 607 trillion won ($515 billion) after the ruling Democratic Party (DP) added 3.3 trillion won. National liabilities will stretch by 108.4 trillion from this year to hit 1,064.4 trillion won next year. Budgetary spending has increased by 52 percent (207 trillion won) and national debt 61 percent (404.2 trillion) from 2017, when Moon came into office. The debt-to-GDP ratio will also soar to 50 percent from 36 percent. This is hardly good fiscal management. Moon will be dumping a huge burden on the next government regardless of who wins the presidential election in March.

Moon expressed pleasure to see “the smooth approval of the budget bill.” Again, he is being misleading. The budget bill was railroaded by the DP due to a boycott by the opposition People Power Party (PPP). The defense committee of the National Assembly had slashed the budget for a light aircraft carrier project to 500 million won from 7.2 billion won on a bipartisan agreement citing a lack of urgency for the spending. But the DP revived the original scheme at the request of the Blue House. The PPP protested for breaking the bipartisan agreement. A defense project must not be decided in a single administration.

The suspension of spending to supplement the four river projects is also controversial. The government plans to start a 900-billion-won project to move drinking water reservoirs and pumping facilities around four major rivers, but earmarked only 80 billion won in next year’s budget. It should have expedited spending on a project that can be reexamined under the next administration.

The future of Moon’s so-called Korean New Deal project is also blurry. The budget for the project to renovate school buildings for digitalization and green structure was shaved by 175.7 billion won and another project to digitalize and automate the water management system was cut by 45.2 billion won. In October, Moon said next year’s budget would be his government’s last spending scheme and the first for the incoming government. But various interference from Moon raises questions if there has been any consideration for the new administration.
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