State Budget Cut Planned Under Lee
By Na Jeong-ju
Staff Reporter
The government is discussing measures to cut fiscal expenditure by 20 trillion won in response to calls from President-elect Lee Myung-bak that the country should reduce taxes and its budgets to ensure ``small government.''
The Ministry of Planning & Budget said Monday its officials will meet with Lee's transition team Tuesday to discuss ways of saving state funds.
Earlier, the ministry said it will increase its budget spending by more than 7 percent this year, raising concerns about fiscal health and a higher taxpayer burden.
According to a 2008 budget plan, fiscal spending will reach 257.3 trillion won, up 7.9 percent from last year's 238.4 trillion won. The budget growth rate is the highest since 2002 when it stood at 10.5 percent.
Last year, the ministry set up roadmaps for budget spending for the next decades based on the current government's policies. However, it looks inevitable the ministry will overhaul the plans.
President-elect Lee promised to cut the national budget by 20 trillion won by streamlining government agencies, selling state-owned firms and cutting corporate taxes.
Last week, the ministry said it is examining 298 state-owned firms to either overhaul or privatize some of them in line with Lee's pledge to transform them into more efficient and profit-oriented ones.
President Roh Moo-hyun has pursued an expansionary fiscal policy, putting more weight on welfare programs amid a rapid increase in the number of elderly citizens and the widening gap between the rich and the poor. The Roh administration has been criticized for recklessly funneling state funds to various social welfare projects.
Under the Roh administration, the number of civil servants increased by about 50,000, and another 50,000 more will be recruited over the next five years.