Ruling and Opposition Parties Reach Provisional Agreement on 607 Trillion Won Budget for Next Year... 300,000 Won Compensation for Small Business Losses (Comprehensive)

Small Business Loss Compensation to Exceed 300,000 KRW... Additional Budget Discussions for Expanding Local Currency Issuance
Net Increase Compared to Government Proposal for 2 Consecutive Years, Processed Within Legal Deadline

[Image source=Yonhap News]

[Asia Economy Reporter Jang Sehee] The ruling and opposition parties have reached a tentative agreement on next year's budget bill totaling 607 trillion won, which is about 3 trillion won more than the 604 trillion won budget proposed by the government.

On the afternoon of the 1st, Yoon Ho-jung, floor leader of the Democratic Party of Korea, Kim Ki-hyun, floor leader of the People Power Party, and Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, held a budget consultation meeting at the National Assembly and reached this agreement.

With total expenditures expanded by about 3 trillion won compared to the government's submission, the government budget has increased for two consecutive years.

Han Byung-do, senior deputy floor leader of the Democratic Party, told reporters, "Considering the tax support effects for small business owners facing management difficulties due to COVID-19, we agreed to increase the revenue budget by more than 4 trillion won," adding, "Through prioritizing fiscal expenditure adjustments, the expenditure budget will be reduced by more than 5 trillion won."

He stated, "According to changes in the revenue budget, the ruling and opposition parties agreed to prioritize the use of remaining resources, excluding the 2 trillion won-level local allocation tax reflecting legal obligations and the reduction in government bond issuance, for tailored support expansion such as loss compensation for small business owners, low-interest financial support for non-targeted industries, reinforcement of quarantine and medical budgets considering the quarantine situation, and support for livelihood issues including farmers, fishermen, and vulnerable groups."

It was reported that the ruling and opposition parties reached a consensus to set the small business loss compensation at 300,000 won or more.

Additionally, it is known that further consultations are underway to secure the budget necessary to issue local currency at a level equal to or higher than this year's 21 trillion won, as requested by the ruling party.

The ruling and opposition parties plan to convene a plenary session on the 2nd to process the budget bill and 17 subsidiary revenue budget bills.

Accordingly, it is expected that the budget bill will pass the National Assembly within the legal deadline (December 2) for the second consecutive year following last year.

This content was produced with the assistance of AI translation services.