But the prospect of passing the bill by Dec. 2, a legal deadline set by a parliamentary law otherwise known as “National Assembly Advancement Act,” remains grim as the opposition-dominated legislature poses challenges upon government-proposed budget bills.

“Neither the ruling party nor opposition bloc can seize a sweeping victory during the budget battle,” said Rep. Kim Hyun-mee, lawmaker of the main opposition Minjoo Party of Korea and chairperson of the Assembly’s Special Committee on Budget and Accounts.

Over the past two years, yearly budget bills have cleared the Assembly before the deadline as the Saenuri, based on the advancement law, put the bill to a plenary floor vote, even without opposition approval. Now holding 129 out of the 300 parliamentary seats, the ruling party is no longer capable of meeting the required three-fifths quorum.

At the core of the budget battle is the debate on whether to raise the corporate tax rate. Since the previous Lee Myung-bak administration lowered the tax rate from 25 to 22 percent in 2009, opposition lawmakers have been working to bring the rate back to its previous level of 25 percent.

It is the claim of the Minjoo and People’s Party that the 2009 tax cut had offered benefits only to a limited number of top-tier conglomerates, not to the nation‘s economy in general. They also argued that more taxes are needed to implement the pending state-led welfare policies.

But Saenuri lawmakers and some business groups countered that the tax hike would hamper the government’s effort to jumpstart the nation’s faltering businesses, describing that the measure is “global trend” shared by advanced economies aiming to boost their economies.

The escalating tax battle is expected to depend upon the position taken by the Assembly Speaker Rep. Chung Sye-kyun. The top legislator has an authority to designate the auxiliary bills to the state budget bill.

“Given that corporate tax plays an important part in tax system, I believe that it is eligible as an auxiliary bill,” Chung told reporters last week, alluding his approval for the move.

Should the former Minjoo lawmaker maintain his view, the motion to reinstate the former corporate tax rate may directly be put to a full floor vote, without committee-level reviews.

Chung had clashed with Saenuri lawmaker over his decision to allow the passage of a motion asking for the dismissal of Agriculture Minister Kim Jae-soo over ethical lapses. Angered by the move, Saenuri leadership boycotted the state audit for days, calling for Chung’s resignation.


By Yeo Jun-suk
(jasonyeo@heraldcorp.com)