[2024 Budget] The Tightest Budget Ever... Total Expenditure for Next Year Set at 657 Trillion Won

2024 Budget Approval
Only 2.8% Increase from This Year
Yoon "Rejects Fiscal Omnipotence"
Strengthening Support for Vulnerable Groups and Future Investments

The government has drafted next year's budget at a scale of 657 trillion won. This is a 2.8% increase from this year's main budget (639 trillion won) and represents the lowest expenditure growth rate since fiscal statistics were reorganized in 2005. This fiscal restructuring, which blocked leakage factors amounting to 23 trillion won, was the result of the government re-examining the validity and effectiveness of all fiscal projects from scratch.

On the 29th, the government held a Cabinet meeting chaired by President Yoon Seok-yeol, where the '2024 Budget Proposal' with these details was approved and scheduled to be submitted to the National Assembly on the 1st of next month.

At this meeting, President Yoon stated, "Due to the previous administration's reckless fiscal management, national debt increased by 400 trillion won and surpassed 1,000 trillion won for the first time last year," adding, "Our government firmly rejects the 'fiscal omnipotence' that the previous administration was deeply immersed in and has clearly shifted to a sound fiscal policy."

[Image source=Yonhap News]

Regarding the sound fiscal policy, President Yoon emphasized, "The rapidly rising trend of national debt growth has sharply slowed down," and "Major international credit rating agencies are positively evaluating our country's external creditworthiness. The reason is our sound fiscal management."

While transitioning the fiscal policy from expansionary to sound, the government plans to continuously strengthen support for vulnerable groups and investments for future preparedness. In particular, next year's welfare expenditure is set at 242.9 trillion won, a 7.5% (16.9 trillion won) increase compared to this year (226 trillion won). While the health sector budget was reduced by 5.1% due to decreased COVID-19 response needs, the social welfare budget for basic living security, the elderly, and the disabled was increased by 8.7%.

President Yoon explained, "We will focus intensive support on three core areas: realizing true welfare for the vulnerable, strengthening the essential functions of the state such as national defense and the rule of law, and securing growth engines for creating quality jobs," adding, "First, by rejecting election vote-buying budgets, we will use the saved resources to provide stronger support for the common people, vulnerable groups, and socially disadvantaged."

Specifically, livelihood benefits were raised by a record-high 13.2%. For a four-person household, the monthly amount will increase from 1.62 million won this year to 1.834 million won next year, an increase of 213,000 won. The medical aid support obligation criteria for severely disabled persons have been abolished, and the property criteria for supporters have been raised regionally from the current 100 million to 230 million won to 200 million to 360 million won. The budget for disabled care was increased by 330 billion won to 2.65 trillion won compared to this year. The budget to establish a one-on-one care system for the most severely developmentally disabled was dramatically expanded from 1.5 billion won this year to 70.2 billion won next year.

Jobs for the elderly will reach a record high of 1.03 million, an increase of 147,000 from this year. Allowances will also be raised by 20,000 to 40,000 won per month for the first time in six years. To support this, the government expanded the budget from 1.54 trillion won this year to 2.0262 trillion won next year, a 31.5% increase. Measures to address low birth rates will also be strengthened. The income eligibility for Didimdol and Buteemok loans for newborn families will be significantly relaxed from 70 million won to 130 million won annually. The parental leave period for child care will be extended by six months, and the special co-care benefit cap for infancy (up to one year old) will be raised from 3 million won to 4.5 million won.

The research and development (R&D) budget is set at 25.9152 trillion won, a sharp decrease of 16.6% compared to this year (31.0778 trillion won). The government explained that despite the rapid increase in R&D investment, visible outcomes have been insufficient, and there is a need for structural reform due to the proliferation of small-scale, fragmented budgets. However, with a significant increase in cash welfare expenditures next year, national debt is expected to continue growing. Although the pace of national debt increase, which had been around 100 trillion won annually since 2020, slowed somewhat last year and this year, it is projected to increase by 61.8 trillion won compared to this year.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho said, "Despite the accumulated national debt exceeding 1,000 trillion won and the still difficult fiscal situation, tax revenue conditions this year and next year are also challenging," adding, "Next year's budget proposal has significantly reduced the scale of expenditures compared to this year's budget increase rate of 5.1% by tightening the belt even more."

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