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The government has set next year’s budget at 555.8 trillion won, an increase of 8.5% from this year’s original budget.
By issuing nearly 90 trillion won of deficit government bonds, it endured the situation where the national debt exceeded 900 trillion won and chose the largest expansion budget in history.
It was decided that the country’s (finance) barracks should open wide at a time to overcome the situation of the new coronavirus infection (Corona 19) and prepare for a major economic and social structural transformation.
The government held a meeting of the state council on the 1st and confirmed the government’s budget plan for next year at 555.8 trillion won.
This is an 8.5% increase from this year’s budget. Compared with the size of the third supplemental budget this year, it increased by 1.6%.
(Provided by the Ministry of Strategy and Finance)Based on this budget, the growth rate of total spending for next year (8.5%) is similar to that of 2019 (9.5%) and 2020 (9.1%), but the expanded fiscal level minus the growth rate of total revenue (0.3%) of total spending growth rate is 8.2%, the highest in history.
For the second year in a row, a budget has been established with total expenses (555.8 trillion won) exceeding total revenue (483 trillion won).
As a result of this expansion, the national debt will increase to 945 trillion won next year. The ratio of national debt to gross domestic product (GDP) is 46.7% and the ratio of managed fiscal deficit to GDP is 5.4%.
According to the third supplement, this year the national debt is expected to be 89.4 trillion won, the national debt ratio to be 43.5% and the managed fiscal balance deficit ratio to be 5.8%.
However, the government decided to invest in large-scale financial investments, seeing next year as the ‘golden time’ to overcome the Corona 19 crisis.
Vice Premier Hong Nam-ki and the Minister of Strategy and Finance said in a preliminary briefing on the 2020 budget proposal on the 27th. “It is correct to do so faithfully.”
The Korean version of the New Deal is part of the government budget for next year. To jump to a leading country in the post-crown era, only government spending of 21.3 trillion won is invested.
It allocated 7 trillion won to the Digital New Deal, 8 trillion won to the Green New Deal, and 5.4 trillion won to strengthen the social and labor safety net. It also creates a New Deal Investment Fund worth KRW 1 trillion.
The key to the budget to overcome the crisis of the crown is employment. It spends 8.6 trillion won to maintain or create more than 2 million jobs.
In addition, it will invest 1.8 trillion won to create a consumption of 20 trillion won, such as increasing the issuance of local love gift certificates to 15 trillion won.
By class, a lot of effort was put into the youth. The so-called ‘package of hope’ was created by investing a total of 20.7 trillion won in vital stability, education and well-being, from youth jobs to housing.
It will invest 16 trillion won in the balanced national development project and will begin to invest seriously next year. The basic design of 13 SOCs, including the Southern Inland Railway, will be completed and construction will begin on six sites, including the Southwest Coastal Tourism Road.
Public safety issues, such as the allocation of 1.8 trillion won for K quarantine and 2.6 trillion won for flood prevention, are also one of the big items in next year’s budget.
By 2022, the standards for those who are required to support will be completely abolished and free secondary education will be provided starting next year. The 5.98 million recipients of the basic pension are paid 300,000 won per month, and the disability pension rises to 300,000 won per month.
As the fiscal situation deteriorated, large-scale expenditures were incurred and existing expenditures worth 10 trillion won were restructured.
Recurring expenses used by civil servants and public institutions have been reduced by more than 5%, and the rate of improvement for civil servants next year is set at 0.9%, lower than the rate of salary increase minimum.
Deputy Prime Minister Hong Nam-ki and the Minister of Strategy and Finance giving a preliminary briefing on the 2021 budget on the 27th▶ Click here to enlarge
Regarding the distribution of financial resources by sector, the health, welfare, and employment sectors amounted to 199 trillion won, approaching 200 trillion won. Between them, the work budget amounted to 30 billion won.
Regarding the growth rate of spending next year, industry, SMEs and energy occupy the first places with 22.9%, employment 20.0% and the environment 16.7%. This is because it reflects the economic response and the Korean version of the New Deal.
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