Korean gov’t aims to bump up welfare spending in 2018 for inclusive, people-centered growth

Korean gov’t aims to bump up welfare spending in 2018 for inclusive, people-centered growth


The South Korean government has unveiled its
budget proposal for 2018,… the first year of pushing forward its inclusive and more
‘people-centered’ socioeconomic policies. It has allocated the largest increase in welfare
spending,… taking up a third of the entire annual budget. Our Oh Soo-young has the numbers. Improving citizens’ livelihoods is at the
core of the South Korean government’s proposed budget for next year. Of the three-hundred-and-eighty-two billion
U.S. dollar budget,… more than a third will be allocated to job creation and social welfare
programs– a record on-year increase of twelve-point-nine percent. Spending on education will also get a boost
of eleven-point-seven percent,… and, amid higher tensions with North Korea,… defense
spending will be upped by nearly seven percent to support the development of a three-pillar
defense system,… and a salary hike for soldiers. (Korean)
“Budgetary spending will expand by seven-point-one percent next year,… two-point-six percentage
points above the nominal growth rate. That hasn’t happened in nine years. We have made rigorous cuts in government spending
worth nine-point-seven billion dollars to afford this and keep national debt-to- GDP
ratio in the 40 percent range.” The biggest cutback — at 20 percent — has
been made to social overhead projects, followed by culture and leisure at eight percent and
environmental spending at two percent. In addition to the spending cuts,… the finance
ministry says extra tax collection– a natural rise of nearly 54 billion dollars — will
boost financing of the government’s five-year policy goals tallied at 158 billion dollars,…
and even additional welfare policies introduced in recent weeks. These include the expansion of health insurance
coverage and monthly childcare benefits. However, without raising taxes on the middle
class,… experts question whether the government can keep its balance sheet in the black. (Korean)
“Down the line, government spending seems set to grow… so the flow of income needs
to match that — or taxes will have to go up. But the government has already proposed a
tax hike for high income earners and conglomerates. According to 2015 figures, there’s room for
a general rise in taxes for all citizens,… as Korea’s tax-to-GDP ratio is 25-point-three
percent,…some nine points below the OECD average of 34-point-four percent.” Instead of kicking the can down the road,…
experts say the government must first establish the appropriate level of welfare coverage,…
and seek societal consensus on working towards it by steadily raising taxes. Oh Soo-young, Arirang News.

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