'Free High School Education but Student Loan Support?' Public Institutions to Eliminate Excessive Welfare... Budget Cut by 1.1 Trillion Won

[Asia Economy Sejong=Reporter Son Seon-hee] Despite the government implementing free high school education, it has been revealed that 72 public institutions, including the Korea Workers' Compensation and Welfare Service, have been paying tuition fees for employees' children using taxpayers' money. Additionally, three institutions, including the Korea Small and Medium Business Bank, a state-run bank, have been providing childcare expenses on their own despite the implementation of free early childhood care. The government plans to abolish such wasteful welfare systems in public institutions and cut a total budget of 1.1 trillion KRW over this year and next year.

On the 17th, the Ministry of Economy and Finance held the 14th Public Institution Management Committee chaired by Second Vice Minister Choi Sang-dae, reporting plans for budget efficiency and welfare improvement according to the 'Public Institution Innovation Guidelines.' Based on innovation proposals submitted by each public institution by the 8th of last month, the public-private joint 'Public Institution Innovation Task Force (TF)' conducted inspections, consultations, and adjustments, finalizing the plan at the committee meeting.

The government decided to cut a total of 1.1 trillion KRW in operating expenses and business promotion expenses for 350 public institutions from the second half of this year through next year. This includes 714.2 billion KRW in operating expenses and 6.3 billion KRW in business promotion expenses for the second half of this year, and 431.6 billion KRW in operating expenses and 8.2 billion KRW in business promotion expenses for next year.

Accordingly, operating expenses will be reduced by 3%, and business promotion expenses by more than 10%. Among these, energy public enterprises such as power companies, which have large operating expenses, will cut operating expenses by more than 10% in the second half of this year. This is the first time in 14 years since 2009 that operating expenses of public institutions have been cut. After a 5% cut in 2009, operating expenses were either frozen (0%) or increased by less than 2% annually from 2010 to this year.

The current public institution improvement plan also aims to address some excessive welfare benefits that have been maintained wastefully. As a representative case, regulations allowing 72 institutions, including the Korea Workers' Compensation and Welfare Service, to support tuition fees for employees' children despite the implementation of free high school education will be abolished. Additionally, three institutions including the Korea Small and Medium Business Bank, which have been providing overlapping childcare expenses despite free early childhood care being implemented, will cease such payments.

The in-house loan system, which has been provided to employees at excessively low interest rates by 62 institutions including the Korea Water Resources Corporation, will also be improved according to relevant guidelines. Furthermore, excessive leave systems such as granting special leave for employees' and their spouses' grandparents' 60th birthday celebrations will be reduced or abolished to align with the level of national public officials. In addition, when 14 institutions including Korea Electric Power Corporation support tuition fees for overseas dispatched employees' children, they will be required to comply with domestic 'Public Officials Allowance Regulations.'

Accordingly, the government estimates that the total welfare expenses of public institutions, which amounted to 859.4 billion KRW last year, will be reduced by about 2.2% (19.1 billion KRW) next year.

The Ministry of Economy and Finance stated, "We will monitor the implementation performance of each institution according to the finalized innovation plan quarterly, report to the Public Institution Management Committee semiannually, and reflect the results in management evaluations."

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