KRW 638.7 Trillion Next Year's Budget Passed in National Assembly Plenary Session... First Reduction in 12 Years

310 Billion KRW Cut in National Assembly Review Compared to Government Proposal
Increased Budget for Local Love Gift Certificates and Others
"This Year Was Conducted More Secretly" Voices of Criticism

[Asia Economy Reporters Naju-seok, Lee Hyun-joo, Park Joon-yi] The National Assembly held plenary sessions over two days starting on the 23rd and passed a budget bill worth 638.7 trillion won. The budget was approved about three weeks past the legal deadline, marking the longest 'late' approval since the introduction of the National Assembly Advancement Act. However, a catastrophic outcome such as a 'provisional budget' or 'opposition party's unilateral amendment' was avoided.

[Image source=Yonhap News]

The plenary session, which began at 10 p.m. on the 23rd, reviewed tax laws and other matters, and the budget was finally approved past midnight into the early morning of the 24th. Since the Budget and Accounts Committee's review period had ended, the budget was put to a vote in the form of an amended proposal signed by Woo Won-sik, the chairman of the Budget and Accounts Committee, without going through the committee itself. Of the 273 members present, 251 voted in favor, 4 against, and 18 abstained, resulting in approval.

The budget was approved at 638.7276 trillion won, reduced by 314.2 billion won from the original government proposal of 639.0419 trillion won. Increases amounted to about 3.9 trillion won, while cuts totaled about 4.2 trillion won. This is the first time in three years since the 2020 budget that the total expenditure size turned into a net reduction during the National Assembly's review process. Compared to the 2022 main budget (607.7 trillion won), excluding two supplementary budgets, it increased by 5.1%.

Choo Kyung-ho, Deputy Prime Minister and Minister of Economy and Finance, explained during the plenary session, "Next year's total expenditure was set at 639 trillion won, marking the first decrease compared to the previous year since 2010, to firmly establish a sound fiscal policy. Despite difficult fiscal conditions, we executed a record-high 24 trillion won in expenditure restructuring, focusing investments in three directions: protecting the underprivileged and socially vulnerable, supporting a dynamic economy, and ensuring national safety."

By sector, the health budget was cut by 704.8 billion won, contingency funds by 600 billion won, defense by 150.6 billion won, and environment by 158.7 billion won. Conversely, general and local administration budgets increased by 440 billion won, industry, SMEs, and energy budgets by 300 billion won, and social welfare budgets by 138 billion won.

Looking at detailed projects, the National Assembly's review resulted in a new increase of 352.5 billion won for the local love gift certificate budget. This increase will raise the total size of the local love gift certificates to 8.8 trillion won. The rental housing budget also increased by 663 billion won. Public senior job programs received an additional 92.2 billion won, and cooling and heating costs for senior centers increased by 6.6 billion won.

Budgets were also increased by 14 billion won for expanding the supply of 20 trillion won in Jeonse and monthly rent deposit refinancing loans, 28 billion won for temporary special guarantees for vulnerable borrowers, and 8.5 billion won for energy vouchers supporting electricity and gas bills for low-income households. To stabilize rice prices, an additional 40.1 billion won was allocated for strategic crop direct payment projects.

For youth budgets, the Youth Employment Tomorrow Savings and Youth Tomorrow Savings programs were increased by 6.1 billion won (for an additional 10,000 people). The ICT convergence smart factory dissemination budget, which will serve as a stepping stone to securing future competitiveness for SMEs, was also increased by 18 billion won.

[Image source=Yonhap News]

To promote renewable energy and carbon neutrality, the renewable energy support budget was increased by 50 billion won compared to the government proposal. To strengthen systems protecting the safety and lives of citizens, the 119 ambulance replacement and reinforcement budget was increased by 4.2 billion won. Budgets related to persons with disabilities were also increased by 16.4 billion won. Childcare fees for infants and children with disabilities were increased by 2 percentage points, adding 18.3 billion won.

Additionally, a special account for higher and lifelong education support was newly established on a three-year temporary basis to strengthen investments in higher education and lifelong learning.

During this review process, the budget for the new state guesthouse, which was planned during the presidential office relocation, was completely cut. The Ministry of the Interior and Safety's police bureau operating expenses budget of 290 million won and the Ministry of Justice's Personnel Information Management Unit operating expenses budget of 370 million won were each cut by 50%.

Meanwhile, this budget was formulated through negotiations between the ruling and opposition floor leaders without going through the Budget and Accounts Committee or other approvals. Regarding this, Justice Party lawmaker Bae Jin-kyo criticized the budget process, saying, "This year, the budget review and agreement process was conducted even more secretly and covertly. Not only me, as a member of the Budget and Accounts Special Committee, but also most of the members present here had no way of knowing the budget review situation." He added, "There is no way a proper budget can be created through such flawed procedures."

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