[Column] A strange budget process

Suh Kyoung-ho
The author is an editorialwriter at the JoongAng Ilbo.

The concessions by the rivalling political parties after much dillydallying finally paved the way to launch next year’s budget by the time the new year begins. The budget for subsidizing gift cards issued by local governments — the signature brainchild by opposition party chief Lee Jae-myung — was cut by half to 352.5 billion won ($276 million) from the initial demand of 705 billion won by the Democratic Party (DP). The government yielded from its earlier position of requiring local governments to finance the consumption stimuli program according to their own budget.

The budget for the police bureau under the Ministry of the Interior and Public Safety and for the operation of personnel information management bureau of the Ministry of Justice was also axed by half to 255 million won each from the proposed 510 million won. The government proposal to appropriate some of the subsidies for elementary and secondary education for funding for tertiary education institutions was halved to 1.5 trillion won from 3 trillion won.

Half-and-half settlement became the common feature in budgetary review to underscore how slack and uncreative the legislators had been through the standing and budgetary committee review process.

How can the management of the world’s 10th largest economy be so clumsy?

National Assembly Speaker Kim Jin-pyo, center, poses with People Power Party floor leader Joo Ho-young, right, and his Democratic Party counterpart Park Hong-keun in his office, Dec. 15, before a meeting to moderate their dramatic differences on the government-proposed budget bill for 2023.

Behind-the-scene review and deal-making was repeated, or in fact worsened. The special committee on budget and accounts handed over the budget bill to a so-called “sub-subcommitee” even without completing its review on the cuts from the government proposal. The sub-subcommitee is comprised of select members of the negotiating parties and executives of the special budget committee. Under the National Assembly Act, the discussions are not recorded and can remain confidential. The budgetary review inevitably would be negligent and flawed since it is in the hands of a few lawmakers.

The exclusive members were busy pocketing gains for their own constituencies. The Fiscal Reform Institute, a private think tank, came up with an intriguing study. There were 32 projects under the jurisdiction of the Ministry of Land, Transport and Infrastructure whose budget had been increased by more than 5 billion won. All of them were bridge, railroad, and local pork-barrel projects unrelated to public housing rental projects. Coincidentally, the budget for new expressways from Hamyang to Ulsan, Gwangju to Gangjin, and Moonkyung to Kimcheon, and Moondong to Songjeong were all hoisted up by 5 billion won each. How could every one of them in different regions and scale receive the same budgetary increase? The outcome only could have been derived from political consideration not from social needs, the institute concluded.

Most of the scaled-up projects from the National Assembly review are dubbed as “exhibitionist budget,” because many of them are not carried out as planned. They exist merely in names without any real help for the local economy. For household and corporate finance, any savings can be good. But it is different for public finance. Budget is appropriated according to prioritization for optimal employment of limited resources. Therefore, much of the tax funding could have been wasted to serve individual lawmakers. Lawmakers could credit themselves to appeal to more votes, but they won’t be able to grow as political leaders to be recognized by a broader population.

There has been a suggestion about going public with the discussions made in the stealthy sub-subcommitee to help raise the transparency in budgetary review. Some oppose the idea, claiming that discussions could come under the greater sway of lobbying from citizen or interest groups. The Solidarity against Disability Discrimination vowed to renew its sit-down protests at subways next month after finding just 0.8 percent of its demanded budget for improving subway infrastructure for the disabled had been reflected. The group is not the only lobby group staging rallies for budgetary increases. The Fiscal Reform Institute proposes those secret discussions at least be recorded.