Government to Promote Restructuring of 34 Trillion Won Private Subsidy and Public Contribution Project Expenditures

Ando Geol, Vice Minister of Finance, Holds Financial Management Strategy Committee Meeting

Ando-geol, Vice Minister of Strategy and Finance, is presiding over the 4th Fiscal Management Strategy Committee held on the 2nd at the PPS Hall of the Seoul Regional Public Procurement Service in Seocho-gu, Seoul, delivering opening remarks.

[Sejong=Asia Economy Reporter Kim Hyunjung] The government is undertaking a comprehensive expenditure restructuring of private subsidy projects and public institution contribution projects worth 34 trillion won.

Andogul, Vice Minister of Strategy and Finance, chaired the 4th Fiscal Management Strategy Committee at the Seoul Regional Public Procurement Service on the 2nd, discussing and announcing these details. The Ministry of Strategy and Finance, which received budget requests from each ministry by the end of last month, plans to officially begin next year's budget formulation based on the results of this meeting.

The government will first implement expenditure restructuring targeting 1,545 private subsidy projects worth 12.3 trillion won that have been supported for more than three years. Projects that have achieved their support objectives or where the need for support has disappeared due to changed circumstances will be abolished, and similar or overlapping projects will be consolidated or the roles between ministries will be readjusted. Projects with poor execution or unsatisfactory performance, or those with fraudulent receipt of subsidies, will have their subsidies reduced, cutting about 5?10% of each project's budget this year. During the budget formulation process, the subsidy rate system, which was set per project, will be reorganized by introducing a multi-stage standard subsidy rate method.

Contribution projects worth 21.5 trillion won across 579 public institutions will also be revised. Projects deemed ineligible after legality and appropriateness reviews will be abolished or converted into other projects that can be strictly managed, such as subsidy projects or private consignment projects.

Projects entrusted with and performing policy funds will have their operating expenses adjusted. For contribution institutions generating their own income, operating expenses will be set based on management improvement efforts; if excess income occurs, some portion will be allowed to be reserved as future resources, and incentives will also be considered.

Restructuring of private subsidy projects and public institution contribution projects will be led by ministries, with the fiscal authorities providing guidelines and private experts offering consultation and verification.

The government has decided to unify the financial support channels for child abuse prevention projects, currently divided into 12 projects across 5 ministries, into the Ministry of Health and Welfare’s general account. Until now, related channels were divided among the Ministry of Health and Welfare’s general account, the Ministry of Justice’s Crime Victim Protection Fund, and the Ministry of Strategy and Finance’s Lottery Fund. Along with this, the priority of related budget investments, which had focused on infrastructure construction and isolation/protection of victimized children, will be adjusted to concentrate support on healing and recovery programs for the normal social reintegration of victimized children.

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