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Public firms' spending on welfare remains high despite heavy debt: data

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Published : 2014-02-09 11:31
Updated : 2014-02-09 12:04

Twelve debt-ridden public organizations in South Korea have spent more than 300 billion won ($279.3 million) over the past five years on providing welfare benefits, including financial support for health and education, data showed Sunday.

According to the data offered by government information portal Alio, the most indebted public firms, which include LH Corp., Korea Electric Power Corp. and Korea Coal Corp., spent a combined 317.4 billion won from 2009 to 2013 on four major welfare benefits.

The welfare benefits refer to financial support for baby care and education for workers' children, health, paid leave and expenditures for family occasions such as weddings and funerals.

The data came amid criticism that the country's public organizations, including state-run enterprises, have been excessively generous to their workers in salaries and benefits despite their growing debt stemming from loss-making business. 

As of the end of 2012, the 12 held a combined 412 trillion won worth of debt, which accounted for 83.5 percent of the total debt owed by the country's 295 public organizations.

This worsening debt problem prompted the government to push for a comprehensive public-sector reform, recently urging them to sell their non-core assets, reduce excessive benefits to workers and streamline their overall business structure.

The data showed that the 12 companies spent a combined 227.8 billion won on childcare and education over the past five years, while doling out 60.4 billion won for family occasions, 18.3 billion won for paid leave and 10.8 billion won for medical support. 

Korea Electric Power Corp. led the pack by spending the largest amount of 153.2 billion won on those welfare benefits over the past five years.

Korea Railroad came next with 74 billion won, followed by Korea Coal Corp. with 21 billion won and LH with 19.7 billion won, respectively, according to the data. (Yonhap)

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