[Secret Budget Negotiations] ③ Managing 638 Trillion Won but Budget Review Lasts Only Half a Month... "Total Amount Must Be Examined First"

Budget review with absolutely insufficient time due to national audit, etc.
Need for total volume review beyond project unit review

Editor's NoteThe budget bill for next year barely passed the National Assembly, exceeding the legal deadline by three weeks. Since the budget was processed to avoid a quasi-budget crisis, does that mean there are no more issues? This year's budget review was a clash between the government and ruling party, which held the right to approve increases, and the opposition party holding the majority of seats. During this process, the overall problems of the National Assembly's budget review system were revealed all at once. Although the budget bill was barely processed, it cannot be overlooked because this year's problems could be repeated in next year's budget. Over three parts, we will shed light on the problems of the National Assembly's budget review and seek solutions.

[Asia Economy Reporter Naju-seok] How long does the National Assembly take to review a budget of 638 trillion won?

According to the National Assembly Act and the National Finance Act on the 30th, the period for the National Assembly to review the budget bill is from September 1, when the regular session begins, until December 1, when the budget bill is automatically submitted to the plenary session. Although about 90 days are given, the actual time is much shorter in reality.

Looking at the budget review for next year (2023) conducted this year, the government submitted the budget bill to the National Assembly on September 2, but the actual review began only at the end of October. The National Assembly's Agriculture, Forestry, Livestock, and Food Committee was the first to start the preliminary budget review on October 27, and the Education Committee began the budget review the latest on November 16. The earliest standing committee to complete the budget review was the Defense Committee, which finished on November 4, while the Steering Committee and Education Committee did not complete their budget reviews and passed the responsibility to the Special Committee on Budget and Accounts.

Why does the budget submitted in early September only start being reviewed at the end of October at the earliest?

The answer is that the National Assembly audit (Gukjeonggamsa) takes place during this period. Since the audit is conducted in the middle of the regular session, the National Assembly members' offices and standing committees focus all their efforts on the audit, then take a breather before starting the budget review. After letting more than a month pass this way, the budget review begins. However, in the case of standing committee reviews, budget reviews tend to focus more on increases rather than cuts.

It is common for the standing committees reviewing the budget and the relevant ministries to be in agreement. This year, in some standing committees, there were cases where lawmakers scolded ministries that "have nowhere to spend the budget even if they receive it" while trying to increase their budgets. For this reason, unless there are contentious issues such as the presidential office relocation, most standing committees passed the budget to the Budget and Accounts Committee with significant increases.

[Image source=Yonhap News]

Even when the full Budget and Accounts Committee meeting is held, substantive review does not take place. The full committee meeting proceeds with questions from committee members and answers from the government based on the standing committees' budget reviews. Since it is conducted in the form of questions and answers focusing on national direction or individual project budgets, the actual budget review work such as budget cuts is discussed in earnest in the Budget and Accounts Committee's budget adjustment subcommittee.

The real tug-of-war over the budget begins at this point. This year's subcommittee started on the 17th of last month. Considering the legal deadline for the budget bill on the 2nd of this month, about '15 days' remained at that point.

This year's budget bill was submitted by the government with 8,435 detailed projects. How thoroughly were these projects reviewed during the fortnight? The harshness of this schedule was confirmed at the full meeting of the National Assembly's Political Reform Special Committee on September 29. Member of the Democratic Party (then the ruling party) and former Budget and Accounts Committee secretary Myeong Seong-gyu revealed, "Among about 8,800 expenditure projects in 2022, only about 1,700 were discussed in the Budget and Accounts subcommittee during the regular session budget review process." This was a confession that 7,100 projects were not even reviewed by the National Assembly.

Moreover, this year's budget review was estimated to be smaller in scale than last year due to 1) it being the first budget review after a regime change with a significant shift in national administration direction, 2) the budget review starting immediately after the Itaewon tragedy, and 3) the National Assembly being under divided control with the ruling party in the minority. In fact, the Budget and Accounts Committee ended without even completing the cut review after frequent disruptions. Ultimately, the remaining gaps in the budget review, which the law requires to be completed, were filled through negotiations among floor leaders.

Why is time insufficient?

Primarily, as mentioned earlier, the audit being held in the middle of the regular session is the biggest cause of time shortage. For this reason, there are calls to change the timing of the audit. In fact, this is not a new issue. The current 'Act on the National Assembly Audit and Inspection' stipulates that the audit should be conducted before the regular session, not during it.

However, there is an exception clause allowing the audit to be conducted upon plenary session resolution, and this exception has been used as a reason to hold the audit every October. The exception has become a custom. The root cause is that the National Assembly did not adhere to the original intent of the law. Bills proposing adjustments to the audit timing have already been introduced by both ruling and opposition parties, but they have yet to gain momentum.

On the 1st, the 1st plenary meeting of the Special Committee on Budget and Accounts was held at the National Assembly. Photo by Yoon Dong-joo doso7@

Another factor is the settlement of accounts. According to Article 128-2 of the National Assembly Act, the settlement of accounts should be reviewed and resolved before the regular session. However, in reality, the settlement of accounts has often been resolved during the regular session. The government submits the settlement bill by May 31 for the previous year's budget, but the review often extends into the regular session. Since it was processed on August 31, 2011, the settlement of accounts has been handled during the regular session every year. In 2018, there were even cases where the next year's budget was passed before the previous year's settlement bill was approved by the National Assembly. This year, the settlement bill passed the plenary session on November 10.

Even if the audit and settlement are completed before the regular session as stipulated by current law, a certain amount of time can be secured for budget review.

The National Assembly's budget review must change now

However, there are also calls for more fundamental changes to the National Assembly's budget review. The system should be improved so that the National Assembly can participate from the stage of government budget formulation by receiving reports and providing input. The idea is to have the government report to the National Assembly from April when it sets sectoral resource allocation plans and to explore ways for the legislature to present opinions. This is included in bills proposed by National Assembly Speaker Kim Jin-pyo and Member Myeong, aiming to expand the scope of parliamentary participation from the government budget formulation stage.

Kim Kwang-mook, a budget expert and visiting professor at Seoul National University Graduate School of Public Administration, said, "Our country's budget review is conducted by detailed project structure, but these projects already have a thorough defense structure regarding their necessity, making it difficult to alter them through budget review," adding, "The National Assembly's budget review should be able to review the overall total amount rather than individual projects." This means exploring ways for the National Assembly to review budgets from the total amount level beyond project units.

Myeong, who introduced the National Assembly Act including the permanent establishment of the Budget and Accounts Committee for total amount review, said in a phone interview with this paper, "We need to consider ways to use existing resources more efficiently for the people," and "Since the National Assembly and politicians are in direct contact with the public, budget review system reform should be promoted to reflect the diverse demands of the people during the budget review stage." He emphasized, "If the divided control situation is a problem, reform discussions should proceed even if adjusted to be implemented after the general election," and added, "We must move forward even by a single step."

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