Choo Kyung-ho: "Allocating Regional Love Gift Certificates with Central Government Taxes Is Inappropriate"

"Projects Limited to Effects in Basic Local Government Areas"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho. [Image source=Yonhap News]

[Asia Economy Reporter Lim Chun-han] Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated on the 21st that the budget for local love gift certificates, which the government completely cut from next year's central government budget proposal, "is basically a project whose effects are limited to basic local government areas."

In response to a related question from Lee Dong-joo, a member of the Democratic Party of Korea, during the National Assembly's economic sector government questioning session that day, Deputy Prime Minister Choo said, "I think there was a reason for temporarily implementing it during the COVID-19 pandemic, but it is not appropriate for the central government to allocate resources nationwide using taxpayers' money or debt to operate this project." He added, "It is neither suitable for the nature of the project nor effective to carry it out nationwide in the form of central government subsidies."

Deputy Prime Minister Choo explained, "Therefore, local governments that want to implement this can use the 75 trillion won in local allocation tax that the central government distributes nationwide, and since next year an additional 11 trillion won more than this year will be allocated, local governments can use those resources if they truly believe it helps the local economy. If not, they can adjust priorities and make choices accordingly. This was the rationale behind the budget formulation."

He pointed out, "As this project has been operated, places with higher local fiscal independence have issued more of these certificates, which has led to issues where the central government also has to provide resources."

Deputy Prime Minister Choo concluded, "Since more resources are going to local governments, each local government can decide independently whether to issue more local love gift certificates, build a bridge in the area, or construct another community center, depending on what they believe will best support the local economy."

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