Inter-Korean Fund to Be Cut in 2008 Budget
By Lee Hyo-sik
Staff Reporter
The National Assembly is set to approve next year's budget plan by the end of the year as both pro-government and opposition parties are close to reaching a compromise on the extent of state spending cuts.
Political parties are expected to slash the 2008 budget by some 1.3 trillion won to 256 trillion won. The reduction is smaller than previously anticipated as the main opposition Grand National Party (GNP) had previously insisted government spending for 2008 be cut by five trillion won. In particular, the conservative party demanded the Inter-Korean Cooperation Fund and other North Korea-related spending to be reduced significantly.
But after its presidential candidate Lee Myung-bak won the election last Wednesday, the GNP changed its stance on the bill and agreed to reduce state spending by a smaller margin.
Over the past few months, the National Assembly has failed to pass the budget as the GNP and the pro-government United New Democratic Party (UNDP) were unable to narrow their differences.
Currently, the bill is pending at the Assembly's Special Committee on Budget & Accounts. The law requires parliament to pass it by Dec. 2. According to the political parties, they will forward the bill to the floor for voting by the end of the week as soon as they reach a consensus.
Government officials have been urging the Assembly to pass the budget bill as soon as possible, arguing that the government will not have enough time to adequately plan how to spend money next year and that the people will suffer from political inaction
In September, the government said next year's consolidated budget, which includes ordinary and special accounts as well as state funds, will reach 257.3 trillion won, up 7.9 percent from this year's 238.4 trillion won. Budget spending in general accounts will be about 182.8 trillion won, up 10.4 percent from this year, while expenditures on various state funds will increase 2.3 percent to 74.5 trillion won.
A GNP official said the party now plans to curtail the 2008 budget by 1.3 trillion won, adding it will soon reach an agreement with the UNDP.
He said his party had initially intended to cut the Inter-Korean Cooperation Fund by 250 billion won, but now it wants to reduce the fund by only 150 billion won, saying a number of planned cross-border projects will require more money. The GNP also plans to lower other government spending by smaller margins.
Meanwhile, wages for civil servants will increase 2.5 percent on average next year in line with the government's initial proposal as both pro-government and opposition parties do not oppose it. In 2008, the government plans to pay a total of 23.2 trillion won to its employees, up 7 percent from this year, as it will put more people on its payroll.
This year, salaries rose 2.5 percent from a year earlier, compared with 2 percent in 2006, 1.3 percent in 2005, 6.5 percent in 2003 and 7.9 percent in 2001.