[2023 Budget] Ministry of Land Budget Shock, 4.2 Trillion KRW Cut in SOC and Housing Funds

Won Hee-ryong, Minister of Land, Infrastructure and Transport

[Asia Economy Reporter Cha Wanyong] The Ministry of Land, Infrastructure and Transport announced on the 30th that it has prepared a budget of 55.8885 trillion won for next year. This is a 7.0% (4.1796 trillion won) reduction from this year's budget of 60.0681 trillion won.

The Ministry explained that it implemented a 20% reduction in expenditures this year due to the new government's strong spending restructuring.

Specifically, the budget decreased by 7.6% from 24.4 trillion won this year to 22.5 trillion won next year, and funds such as the Housing and Urban Fund and the Automobile Accident Victim Support Fund decreased by 6.5% from 35.7 trillion won to 33.4 trillion won.

By sector, the SOC (social overhead capital) budget was cut from 24.3665 trillion won this year to 22.5194 trillion won (-10%) next year. Budgets were reduced across all areas including roads (-549.4 billion won), railroads (-821.2 billion won), aviation and airports (-83.9 billion won), logistics and others (-188.4 billion won), R&D (-17 billion won), regional and urban (-419.5 billion won), and industrial complexes (-142.4 billion won).

Among welfare budgets, housing benefits increased by 390.3 billion won compared to the previous year due to expanded eligibility and increased support rates, but the Housing and Urban Fund used for various housing loans (Beotimmok, Didimdol), public rental and sale housing construction was reduced by 2.3326 trillion won compared to the previous year.

The Ministry stated that it plans to utilize resources from commercial banks to convert policy interest rates to market interest rates and compensate accordingly.

Despite the budget cuts, support for housing-vulnerable groups was further expanded. New budgets were allocated for abnormal residence deposit loans of 255 billion won and moving expense support of 3 billion won, while resources were secured for preventing jeonse fraud with 6.1 billion won for jeonse deposit guarantee fees and 166 billion won for low-interest loans for victims of jeonse fraud.

Additionally, to prevent noise conflicts between neighbors, new budgets were created for floor noise performance reinforcement (loan) of 30 billion won and floor noise improvement remodeling (loan) of 8 billion won.

The Ministry allocated 673 billion won to support the timely completion of GTX, and 32.1 billion won for the construction of metropolitan BRT and transfer centers. Furthermore, to guarantee barrier-free mobility rights, the budget for supporting transportation convenience projects for vulnerable groups such as low-floor buses, special transportation means, and wheelchair-accessible buses was doubled from the previous year to secure 224.6 billion won.

In particular, despite the reduction in the SOC budget, the Ministry actively allocated budgets for proactive safety management such as maintenance of aging facilities, disaster prevention, and smart SOC. These include 3.3 billion won for construction safety, 1.8786 trillion won for SOC safety, and 2.5682 trillion won for digital SOC.

Moreover, the Ministry plans to invest in future innovative industries such as mobility, full autonomous vehicle commercialization, urban air mobility (UAM), and spatial innovation with a budget of 1.5461 trillion won, as well as prepare a budget of 557 billion won for a total of 95 national land and transport R&D projects.

Kim Heungjin, Director of Planning and Coordination at the Ministry of Land, Infrastructure and Transport, stated, “The 2023 Ministry of Land, Infrastructure and Transport budget plan rationalizes and streamlines investments through restructuring existing investment areas and boldly invests in new areas. The Ministry under the new government will maximize the fiscal investment effects that the public can feel in housing, livelihood, and future innovation sectors.”

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