Year-End 'Budget War' Foretells Extreme Confrontation... Launch of 'Social Budget' Public Coalition Committee

Opposition Prepares for Budget Battle
Democratic Party Expected to Reveal Budget Review Direction by Late October
Likely to Restore R&D and Climate-Related Budgets

As the 21st National Assembly audit passes its midpoint, the opposition parties have begun organizing their ranks for a 'budget war' against the government's proposed budget cuts for next year. The three opposition parties?the Democratic Party, the Justice Party, and the Basic Income Party?have formed a 'Joint Countermeasure Committee for the Restoration of Social Economy Budget' ahead of the review of next year's budget, initiating efforts to prioritize the restoration of social economy budgets, including support for social enterprises, which have been drastically reduced in the proposed budget. The opposition is also preparing to push for increases in budgets cut by the government, including research and development (R&D), local love gift certificates, and the Saemangeum project, signaling a challenging path ahead for this year's National Assembly budget review.

On the 18th, Hong Ik-pyo, floor leader of the Democratic Party, Jin Sun-mi, chair of the Democratic Party's Social Economy Committee, Kang Eun-mi of the Justice Party, and Yong Hye-in of the Basic Income Party, along with social economy-related organizations, held the launch ceremony of the ‘Joint Countermeasure Committee for the Restoration of Social Economy Budget’ at the National Assembly, demanding the restoration of the social economy budget.

The opposition parties including the Democratic Party of Korea, the Justice Party, and the Basic Income Party are shouting slogans at the launch ceremony of the joint countermeasure committee for the restoration of the social economy budget at the National Assembly on the 18th. Photo by Hyunmin Kim kimhyun81@

The social economy is an economic system based on social values, where production, consumption, and distribution are conducted for the common good. It aims to realize various social values such as improving the quality of social services, creating jobs for vulnerable groups, and revitalizing local communities.

Through an open letter to the government and political circles, the Joint Countermeasure Committee stated, "The current government, while preparing the 2024 budget, abruptly dismantled the long-standing expectations and public-private cooperation framework, drastically cutting projects and budgets related to the social economy with almost no consultation with the private social economy sector." They pointed out, "Cutting the social economy budget not only makes it difficult for social economy enterprises to operate but also results in the loss of jobs for vulnerable groups, destruction of ecosystems that foster social values, and ultimately increases the government's burden."

According to the committee's estimates, the budget for dedicated social economy projects next year has been cut by at least 109.2 billion KRW and up to 489.7 billion KRW compared to this year's budget of 1.1283 trillion KRW. While the exact scale of the cuts is still being analyzed, this represents a reduction of between 9.7% and 43.4% of the total budget. In particular, major social economy project budgets from the Ministry of Economy and Finance and the Ministry of Employment and Labor have been significantly reduced. For example, the Ministry of Economy and Finance's cooperative activation project budget was cut by 91%, from 7.96 billion KRW this year to 780 million KRW next year. The Ministry of Employment and Labor's support agency operation budget was completely cut from 4.22 billion KRW this year, and the social entrepreneur development budget was reduced by 88.7%, from 41.19 billion KRW to 4.67 billion KRW next year.

Chair Jin Sun-mi emphasized, "What we need in difficult times is solidarity and cooperation," adding, "We will strive to restore the drastically cut social economy budget during the National Assembly audit and budget review process and to revitalize the social economy."

Beyond the social economy, the opposition is also raising its response level regarding R&D budget cuts. Following direct criticism of R&D budget reductions by key opposition leaders, a relentless offensive continues in related standing committees during this audit period. The opposition is conducting a detailed analysis of budget details related to the Ministry of Science and ICT as well as other ministries and agencies involved in R&D budgets, pointing out the cuts. They have also launched comprehensive analyses involving the Rural Development Administration, Korea Forest Service, Korea Meteorological Administration, and the National Research Foundation of Korea. Earlier, Democratic Party lawmaker Min Hyung-bae revealed, based on Ministry of Science and ICT data, that next year's national major R&D budget has been cut by 3.6326 trillion KRW across 22 ministries compared to this year, representing a 14.6% decrease.

The Democratic Party of Korea, the Justice Party, the Basic Income Party, and other opposition parties are shouting slogans at the launch ceremony of the joint countermeasure committee for the restoration of the social economy budget at the National Assembly on the 18th. Photo by Kim Hyun-min kimhyun81@

The Democratic Party plans to announce its budget review direction for next year around the end of this month, when the National Assembly audit concludes. A Democratic Party official stated, "In addition to R&D and social economy-related budgets, we will also push for increases in budgets for local love gift certificates and the Saemangeum project." Regarding the R&D budget cuts, the official said, "It seems even the ruling party feels this is unacceptable. Even if a blanket restoration is not possible, we need to open the lid and see how each project can proceed." A Justice Party official emphasized, "The most urgent issue regarding next year's budget is that the total budget amount is too small," adding, "Since this is a result of the tax cut policy, it is necessary to withdraw the tax cuts and increase the overall budget." The official also noted, "Looking at each project, the target for climate response budget was about 17 trillion KRW, but the current budget reflected is around 14.5 trillion KRW, falling short of the target, so restoration in this area is essential."

Meanwhile, Lee Sang-min, senior research fellow at the Nara Salrim Research Institute, mentioned, "The particularly vulnerable area next year is the budget related to local governments," explaining, "With domestic tax revenues decreasing, the budget is reduced by 17 trillion KRW next year, and this year, due to a decline in tax revenue, local allocation tax has been cut compared to the original budget, causing a double impact." He added, "Local governments can endure for about a year, but if financial problems persist for two consecutive years, it will be difficult to sustain, so measures related to this issue are necessary."

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