Gov't, Saenuri Party to push for W15 tril. extra budget

By Choi Kyong-ae

The government and the Saenuri Party have agreed to a supplementary budget of at least 15 trillion won ($13 billion) to support the battered economy amid the Middle East Respiratory Syndrome (MERS) woes, the ruling party said Wednesday.

“The two sides are determined to pass the extra budget as quickly as possible at the National Assembly once it is filed for approval. They also agreed to maximize the supplementary budget as long as it does not risk hurting the country’s financial health,” Saenuri Party spokeswoman Kwon Eun-hee said.

The government will soon come up with measures for Asia’s fourth-largest economy to bounce back in the latter half of the year, Kwon said.

In a consultation meeting held Wednesday at the National Assembly in Yeouido, western Seoul, Finance Minister Choi Kyung-hwan and Saenuri Party Rep. Won Yoo-chul joined other lawmakers in setting a target to submit to the National Assembly by June 6 to receive approval by lawmakers by July 20, the spokeswoman said.

“The supplementary budget will largely be spent to help companies and hospitals whose businesses were hit hard by the deadly MERS virus since May 20 when the first case was reported in Korea,” she said.

In the largest outbreak outside of Saudi Arabia, MERS has claimed 33 lives as of Tuesday, with 13 people in critical condition and about 2,600 still under quarantine at home or hospitals, according to the Ministry of Health and Welfare.

The spokeswoman said the additional budget will also be used to help farmers who have suffered from an unprecedented drought by increasing water supply facilities and by balancing supply and demand of agricultural products.

The supplementary budget also requires approval from the main opposition New Politics Alliance for Democracy (NPAD).

“We doubt that the entire 15 trillion won supplementary budget needs to be used to handle the MERS-related fallout and damage from the drought,” NPAD spokeswoman Lee Un-ju said. “As the government and Saenuri Party seem to be making an attempt to offset the lack of the country’s tax revenue with the extra budget, we will take a closer look at the budget details to stop any such move by the Saenuri Party.”

Instead of using a supplementary budget as a stopgap measure to help boost tax income, the NPAD wants the Park Geun-hye government to raise the “currently low” corporate tax rate, Lee said.

Corporate tax collected in 2014 totaled 35.4 trillion won, down 1.3 trillion won from a year earlier, according to data from the National Tax Service (NTS).

The NTS aimed to have 204.9 trillion won in tax revenue last year but collected 195.7 trillion won. This year, it targeted 210.1 trillion won but as of April had only received 76 trillion won, the data showed.

On Friday, the government will hold a press conference detailing the exact size of the supplementary budget, the Saenuri party said.