National Debt Increasing... Annual Average Expenditure to Rise by 1.1 Trillion Won Due to 2nd Quarter National Assembly Law Passage

National Assembly Budget Office Announces '2022 Q2 Review of Fiscal Impact of Enacted Laws' Report
39.6% of Laws Passed in Q2 Cause Fiscal Revenue or Expenditure

[Asia Economy Sejong=Reporter Kwon Haeyoung] An analysis has emerged that the government and local governments' expenditures will increase by an average of 1.1123 trillion KRW annually over the next five years due to the Fiscal Impact Laws passed by the National Assembly in the second quarter of this year. Previously, the government announced it would consider restructuring the 'mandatory expenditures' structure, which is legally fixed and cannot be arbitrarily reduced by the government, but government expenditures specified by law continue to rise steadily.

According to the "2022 Second Quarter Approved Laws Fiscal Impact Review" report released by the National Assembly Budget Office on the 10th, during this period, the National Assembly passed 134 laws, of which 53 laws, accounting for 39.6% of the total, were fiscal impact laws affecting the finances of central and local governments. Among the 53 laws causing changes in fiscal revenues and expenditures, 30 laws with estimable impacts were analyzed, revealing that government and local government expenditures will increase by a total of 5.3653 trillion KRW from 2023 to 2027. This corresponds to an average annual increase of 1.1123 trillion KRW, with the central government expected to increase expenditures by 1.069 trillion KRW (96.1%) and local governments by 43.3 billion KRW (3.9%).

The National Assembly passed 134 laws in the second quarter, of which 53 laws, or 39.6% of the total, were fiscal impact laws affecting government and local government finances.

By expenditure type, mandatory expenditures accounted for 84.4% of the total and are estimated to increase by an average of 939.2 billion KRW annually. First, following the passage of the "Partial Amendment to the Act on Support for Disabled Persons' Activities," an average annual expenditure of 554.9 billion KRW is expected. This bill includes disabled persons under 65 years old receiving long-term care benefits among the eligible applicants for activity support benefits, enabling them to live as members of the community. Additionally, the "Partial Amendment to the Industrial Accident Compensation Insurance Act," which expands the scope of application of the Industrial Accident Compensation Insurance Act, is expected to result in an additional average annual expenditure of 380 billion KRW.

Discretionary expenditures account for 15.6% of the total, with an expected average annual increase of 43.3 billion KRW due to amendments to the Public Official Election Act, including increasing the total number of city/provincial council members and district/county council members, and raising allowances for election observers and election officials.

On the other hand, the National Assembly Budget Office found no laws among the 30 estimable laws that would cause changes in revenue.

As government expenditures continue to rise, the central government's national debt balance reached 1,007.5 trillion KRW in the second quarter of this year, an amount nearly half of the Gross Domestic Product (GDP).

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