Changwon Special City 'Fiscal Strategy Meeting' ... Announcement of Strong Expenditure Restructuring

Amid the recent decline in tax revenue causing a red alert for local financial management, Changwon Special City in Gyeongnam plans to maintain a sound fiscal policy for next year and initiate a strong expenditure restructuring for the 2024 budget proposal.

On the 6th, the city held the first fiscal strategy meeting chaired by Ha Jongmok, the first vice mayor, with the participation of heads of departments and offices to share the city’s financial status and discuss the direction for next year’s budget formulation.

The fiscal strategy meeting was held for the first time this year following last year’s “Changwon City Fiscal Diagnosis and Soundness Measures Study,” which diagnosed that strategic fiscal management was insufficient. The meeting aims to enable strategic and rational resource allocation through an analysis of fiscal conditions.

With a decrease in local allocation tax due to reduced national tax revenue, and sluggish local income and consumption taxes, local tax revenue is expected to show minimal growth, resulting in a bleak revenue outlook. Meanwhile, budget demands for mandatory expenditures such as statutory costs are increasing, indicating that Changwon City’s fiscal conditions for next year will likely see a deepening imbalance between revenue and expenditure.

Ha Jongmok, 1st Deputy Mayor of Changwon City.

Accordingly, the city plans to maintain a sound fiscal policy through flexible financial management according to economic and social conditions, while continuing strategic fiscal support for “necessary tasks” such as securing future growth engines and addressing social structural issues despite difficult circumstances.

To this end, the city will improve fiscal efficiency by conducting an unprecedented strong expenditure restructuring, reexamining all fiscal projects from the ground up, setting mandatory reduction rates by department, and preparing self-driven expenditure reduction plans to curb excessive investment.

In line with the government’s fiscal policy, management of local subsidy projects is also expected to be strengthened. The city will establish basic principles for subsidy support, and boldly cut or abolish subsidies for poorly managed projects, such as those with misuse of funds, inadequate settlements, overlapping support, or low performance evaluation results. By implementing a standard local subsidy self-contribution system, the city will establish the principle of self-contribution for all subsidy projects and mandate the use of the Local Subsidy Integrated Management System, thereby enhancing the accountability of subsidy recipients and establishing a sound subsidy management system.

Participants in the meeting empathized with the difficult fiscal conditions and engaged in heated discussions on the direction of next year’s budget formulation and expenditure restructuring. Based on the results of the first fiscal strategy meeting, the city plans to hold a second fiscal strategy meeting in October after the review and adjustment process of the 2024 budget proposal for more in-depth discussions.

Ha Jongmok, the first vice mayor, stated, “Expenditure restructuring requires cooperation not only from budget departments but from all city departments. Given the unfavorable fiscal conditions, we will strive to manage sound finances without wavering so that citizens’ taxes are used where they are truly needed.”

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