Published : 2014-04-17 20:36
Updated : 2014-04-17 20:36
The government has announced a package of measures to reduce the fiscal deficit that has been threatening the sound management of the national economy.
The measures, announced earlier this week, include plans to reduce the number of government-funded projects by 600, or 10 percent, over three years by merging and closing overlapping ones.
More significant is the introduction of so-called “paygo” rules for all government projects to be included in next year’s budget. The rules require increases in spending to be offset by spending cuts or revenue increases. This certainly is one of the most effective ways to fight the fiscal deficit.
Korea has been suffering from severe fiscal deficits, which amounted to 132 trillion won during the past 10 years. It posted a deficit of 21.1 trillion won ($20.3 billion) last year, the largest since 2009, and another 64 trillion won is expected to be added to the shortfall by 2017.
Tax revenue last year shrank from the previous year, falling 8.5 trillion won short of the target. It is hardly surprising that the combined debt owed by the government and the public sector reached 821 trillion won last year, equal to 64.5 percent of gross domestic product.
This situation clearly necessitates strenuous efforts to reduce government spending. Not to be left out in these efforts should be the National Assembly, which still “mass-produces” laws for lavish projects.
More than 9,000 bills have been proposed by members of the current National Assembly so far, with nearly 900 of them having been enacted.
Clearly, many of them are the result of pork-barrel politics.
This is strikingly clear in view of the election promises the National Assembly members made when they ran in the last parliamentary elections.
Many prolific lawmakers tout rosy projects that lack concrete financing plans, but the executive branch lacks effective tools to hold such wayward lawmakers in check.
The legislature should follow the executive branch and apply the paygo rules to bills proposed by its members. This would increase the value and worth of their constitutionally exclusive right to make laws, instead of infringing on this right as some ill-advised members claim.