National Assembly to pass 652.7 trillion won budget proposal

Economy

Published: 20 Dec. 2023, 18:52

National Assembly to pass 652.7 trillion won budget proposal

Leaders of the governing and opposition parties and Finance Minister Choo Kyung-ho, fourth from left, pose for a photo on Wednesday after agreeing on a budget proposal at the National Assembly in Yeouido, western Seoul. [YONHAP]

The revised budget proposal for next year, approved by both the governing and opposition parties, amounts to 652. 7 trillion won ($502.6 billion), a decrease of 0.6 percent, or 4.2 trillion won, from the initial draft the government announced in August.

The governing People Power Party (PPP) and main opposition Democratic Party (DP) released a joint agreement on Wednesday detailing a plan to pass the agenda during Thursday’s plenary session at the National Assembly.

Full breakdowns of the budget plan will be revealed after its passage, but Wednesday's statement indicates that major changes to the allocations for research and development (R&D) took place.

The R&D budget will increase by 600 billion won to 26.5 trillion won in 2024. The Ministry of Economy and Finance had initially allocated 25.9 trillion won for R&D, a decrease of 16.6 percent or 5.2 trillion from the previous year. The cut drew heavy criticism from both opposition parties and members of the public who supported prioritizing research in tech and science.

Up until now, the R&D sector was considered immune to budget cuts; the segment has enjoyed more than 10 percent budget growth every year since 2018.

The Finance Ministry, at the time, explained that it had only trimmed funding from select projects. The explanation did little to cool the backlash.

Spending on Saemangeum infrastructure projects will also increase by 300 billion won after previously undergoing a heavy 78 percent cut to 147.9 billion won, due to skepticism the projects have drawn after the poor planning and management associated with the region's World Scout Jamboree this summer.

Expenditures for the vouchers project, through which regional governments can stimulate local spending, will grow by 300 billion won, though a specific budget has not been allotted. Critics have accused the government of taking a cautious stance toward that initiative because it is considered the brainchild of DP leader Lee Jae-myung.

The finalized 652.7-trillion-won budget represents a 2.2 percent increase compared to that of last year — the slimmest growth margin since 2005, when the government changed how the data is compiled.

“Both parties had difficulties reaching agreement on the budget plan, but the two parties made a compromise for the consensus with a common ground that the bill should not be further delayed, given that the legal deadline had already been missed,” said Yun Jae-ok, floor leader and acting leader of the PPP.

It remains unclear which segments underwent cuts. The Finance Ministry had initially earmarked increased funds for welfare and child care to support low-income people and tackle the country's extremely low birthrates, but these were not mentioned in the revised proposal.

BY PARK EUN-JEE [park.eunjee@joongang.co.kr]