One of the most important roles for the legislature is to scrutinize the administration’s use of taxpayer money. But the National Assembly did the opposite with next year’s budget bill, adding to the waste.
The budget bill that the majority ruling Democratic Party of Korea effectively passed single-handedly is the largest-ever, at 607.7 trillion won ($516.3 billion), 3.3 trillion won more than the government proposed, and also up 8.9 percent from this year’s budget.
The government presented a huge budget proposal which topped 600 trillion won for the first time, and then the assembly increased it further rather than holding it down.
Lawmakers increased expenditures apparently to curry favor with voters ahead of the presidential and local elections next year. People cannot but be concerned about tax burden getting heavier. Also, it is questionable if next year’s mammoth budget will improve their economic life while pump-priming the nation’s economy.
Considering the economic impact from the COVID-19 pandemic, increasing expenditures at the price of fiscal deficits is inevitable to some extent. So, the legislature should have examined the increased expenditures more closely to prevent the waste of taxpayer money. But it did not even try to find nonessential expenses to cut.
The total value of local currency coupons increased from the government’s plan of 6 trillion won to 30 trillion won. The coupons, which can only be used at small stores in designated areas, are an initiative advocated by Lee Jae-myung, presidential candidate of the ruling party, as one of his signature policies. However, its effectiveness is controversial. The Korea Institute of Public Finance criticized the coupons for bringing about adverse effects such as dampening retail sales in adjacent areas excluded from the program.
The budget expanded partly due to lawmakers who created or increased expenditures apparently benefitting their constituencies in a bid to strengthen their support bases.
For young people in their 20s and 30s, they appropriated 23.5 trillion won, which will cover rent subsidies for low-income youngsters, raised salaries for enlisted soldiers and expanded college tuition aid. It is questionable if these items are essential and urgent.
The nation faces tough economic conditions. Major economic indicators have fallen short of expectations. Korea’s economy grew 0.3 percent in the third quarter, slower than the first and second quarters and lower than the market expected. Industrial production decreased 1.9 percent month-to-month in October, the sharpest fall since April last year. Export increased 32.1 percent year-over-year in November. But the omicron variant darkens the prospect for exports to keep growing.
Consumer prices last month rose to an 10-year high of 3.7 percent from a year earlier. Stagflation concerns are growing. The gross national income decreased 0.7 percent in the third quarter from a quarter earlier. Increasing government expenditures in this situation will stimulate inflation, which will make the life of working people harder.
The national debt was 626 trillion won in 2016, a year before the Moon Jae-in administration was launched, and it is expected to top 1,000 trillion won next year for the first time, due to the continued expansion of government spending.
The ratio of national debt to the gross domestic product, which was 36 percent in 2016, is forecast to go over 50 percent next year and reach 66.7 percent in 2026.
Taxpayers have not been put at ease. The Moon administration spent astronomical amounts over the last four years, but their lives have barely improved. The nation’s growth outlook is bleak. The government collected tens of trillion won in real estate taxes alone, but national debt has not decreased, rather, it has kept mounting. People increasingly suspect that tax they pay is being wasted.
Despite concerns over the ballooning national debt and increasing tax burden, the administration kept expanding its spending all along the Moon presidency and politicians showed few signs of trying to curb expenditures and reduce national debt. Eventually debt exceeding as much as 1,000 trillion won will have to be paid by the people. It is irresponsible and shameless to turn a blind eye to the snowballing burden and pass it on to future taxpayers.
By Korea Herald (email@example.com