The Moon Jae-in government has released its budget plan for next year, which will rise more than seven percent, or 28 trillion won, from this year to a record 429 trillion won. The spending plan focuses on welfare and job creation.
The government set a record 429 trillion won budget for next year during a Cabinet meeting Tuesday. The plan will be submitted to the National Assembly on Friday.
The government allocated 146-point-two trillion won to health, welfare and labor, marking a record 12-point-nine percent rise in this category from a year earlier.
The budget for education increased 11.7 percent, while funds for defense rose 6.9 percent to 43-point-one trillion won, the largest growth in nine years.
However, spending on social overhead capital was slashed by a record 20 percent and the budget for culture, sports and tourism was also cut by more than eight percent.
The requested budget for youth employment has increased 21 percent.
The government said it will invest 26-point-two trillion won to implement major policies such as raising the minimum wage and the basic pension for senior citizens by reducing unnecessary spending.
The nation’s fiscal deficit is expected to increase one trillion won next year from this year. The national debt is projected to rise 39 trillion won to surpass 700 trillion won for the first time.
The seven percent rise in the overall requested budget is the highest since the 10.6 percent increase in 2009 during the financial crisis.
The government says the expansionary fiscal plan is to faithfully implement policy pledges and support economic growth and restructuring efforts across society.
What stands out the most in next year’s budget plan is substantive investment in “people” such as in job creation, income led growth, public safety and human capital development.
Welfare spending has for the first time topped 34% of the total budget.
December 2 is the deadline for passing the budget bill in the National Assembly. But the deliberation process is expected to be an uphill battle due to gaping partisan differences.
The ruling Democratic Party is determined to have the bill passed without leaving out any major budget items. The opposition has blasted the requested budget as “welfare populism filled with pork barrel measures.”
The opposition has declared a budget war and vowed to drastically reduce the budget through thorough deliberations.