Published : 2013-10-22 20:10
Updated : 2013-10-22 20:10
South Korea has delayed its timetables of striking a fiscal balance over the past years, apparently keeping spending to push for its agendas and passing the bucks of attaining a balanced budget over to the next government, data showed Tuesday.
A fiscal balance refers to a condition where the government spends within its means, causing no deficit or surplus.
The pattern of delaying the timetable was based on the analysis of mid- and long-term fiscal management plans and related data unveiled over the past six years. They were submitted by the Finance Ministry to Rep. Lee Hahn-koo of the ruling Saenuri Party.
According to the mid- and long-term fiscal management plan in 2008, which provided policy directions for the following five years, the Lee Myung-bak administration pushed to attain a fiscal balance by 2012, just before the end of its five-year term.
Under its long-term fiscal management plan in 2009, however, the Lee government delayed the timetable until 2014, citing toughened situations caused by the global financial crisis.
The timetable was brought up later as the economy showed some signs of recovery but the government delayed it again in 2012 until 2014, giving up its initial goal of attaining a balanced budget within its term.
Following the Lee government, the Park Geun-hye administration took office earlier this year and unveiled its own mid- and long-term fiscal management plan.
Under the plan, the government vowed to reduce the fiscal deficit to 0.4 percent of gross domestic product by the end of 2017 from this year’s estimated 1.8 percent.
This has been interpreted by some experts as a move to pass the buck to strike a balanced budget over to the next administration.
The government’s guidelines for spending and expenditure also seem to be easing over the past few years, the data showed.
Under the mid- and long-term fiscal management plan in 2010, the then government vowed to limit the annual spending growth rate to 4.8 percent, which is 2.9 percentage points lower than the revenue growth rate of 7.7 percent, a move aimed at reducing the country’s overall fiscal deficit.
The gap between spending and revenue growth rates, however, fell to 2.4 percentage points under the similar plan unveiled in 2011 and 1.7 percentage points in 2012. It further dropped to 1.5 percentage points in 2013.
Rep. Lee called on the government to put more emphasis on keeping fiscal health in good shape when drafting its mid- and long-term fiscal management plans down the road.
“Such mid- and long-term fiscal management plans are designed to maintain fiscal health by running the country’s money in a stable manner but they seem to be managed not based on scientific grounds but political considerations,” he said. (Yonhap News)