SEJONG -- South Korea will make use of an extra budget as soon as possible to create new jobs for young people and help industrial regions grappling with massive layoffs, the finance ministry said Monday.
With the National Assembly having passed the 3.83 trillion won ($3.54 billion) supplementary budget, an extraordinary Cabinet meeting will be held later in the day to approve a budget implementation plan.
As it took 45 days to pass the bill submitted by the government due to political wrangling over the appointment of a special prosecutor to look into an online opinion rigging scandal, the ministry said it will simplify administrative procedures to promptly inject funds into various programs.
Finance Minister Kim Dong-yeon speaks at the National Assembly on May 21, 2018. (Yonhap)
"Once the budget implementation is confirmed, we will assign money to areas that need it the most," the ministry said in a release.
The parliament cut the subsidies for transportation fees targeted at employees in remote areas and increased financial aid for industrial zones with slumping businesses, reducing a net 21.8 billion won from the government's initial bill.
A large chunk of the money approved by lawmakers will be used to subsidize the hiring of new regular workers at smaller firms, and tax incentives will be given to new workers and small firms that hire them.
The remaining funds will be spent to help those who lost their jobs in the wake of massive restructuring in the shipbuilding and the automaking sectors to revitalize the local economy, according to the ministry.
Under the bill, Gunsan, the home to General Motors' money-losing assembly line, will get financial support and tax incentives. The city on the southwestern coast has faced massive job losses after the American automaker moves to shutter its factory there, following the decision by Hyundai Heavy Industries Co. to close down its yard last year.
Major shipbuilding hubs in the southeastern region, such as Geoje and Ulsan, will also receive subsidies, the ministry said.
The extra budget follows President Moon Jae-in's call for all-out efforts to create new quality jobs in the country and his warning that the high youth jobless rate is a serious challenge to the national economy.
Youth unemployment has consistently worsened due mainly to structural changes in the country's industrial, educational and labor markets. This has led many young people to put off marriage, in turn worsening the already very low birthrate.
In March, the unemployment rate for people between 15 and 29 years of age came to 11.6 percent, the highest for the month since 2016.(Yonhap)