Published : Aug. 2, 2019 - 21:39
South Korea's parliament passed a 5.83-trillion won ($4.9 billion) extra budget bill Friday, supporting the government's efforts to prop up the slowing economy and tackle Japan's export curbs against Seoul.
During a plenary meeting, the National Assembly approved the budget bill in a 196 to 12 vote, with 20 abstentions.
Prime Minister Lee Nak-yon (Yonhap)
Rival parties earlier agreed to cut the proposed fiscal spending by a net 860 billion won from the government's April proposal of 6.7 trillion won.
The extra budget -- more than half of which is to be funded by a debt sale -- is the latest in a series of economic stimulus measures that South Korea has taken to counter an economic slowdown.
It marked the third such supplementary budget under the Moon Jae-in government.
South Korea's 2019 budget stood at 469.6 trillion won. The latest extra budget centers on spending designed to preemptively counter downside economic risks, tackle fine dust air pollution and cope with Tokyo's restrictions of exports to Seoul of high-tech materials.
The South Korean economy faces growing uncertainty at home and abroad, including faltering exports and a trade spat with Japan.
On top of its original budget proposal made in April, the government proposed an additional budget of 273.2 billion won last month to help support local firms dealing with the impact of Japan's export curbs.
If the money related to Japan's export restrictions is taken into account, the combined extra budget proposed by the government was nearly 7 trillion won.
Earlier in the day, Japan's Cabinet approved a proposal to remove South Korea from a "whitelist" of countries subject to preferential trade status, following its July 4 imposition of export curbs of high-tech materials against the South over a historical issue.
Korean political parties were under public criticism for their failure to vote on an extra budget bill and a parliamentary resolution condemning Japan's export restrictions before Japan took an additional retaliatory move.
The rival parties agreed to keep intact the volume of Japan's export curbs-related budget as initially proposed, citing the urgent need to cope with the issue.
They also decided to cut the issuance of debt-covering bonds by 300 billion won from the proposed debt sale of 3.6 trillion won to fund the extra budget.
A day earlier, the main opposition Liberty Korea Party called on the government to unveil measures to slash the volume of selling debt-covering bonds, raising concerns about fiscal soundness.
During budget reviews, the LKP had argued for a sharp cut, claiming that the extra budget was designed to create jobs to win voters over ahead of next April's parliamentary elections. The ruling Democratic Party defended the budget proposal as a critical step to bolster the economy.
The National Assembly held its first plenary meeting for voting on bills since early April. A monthlong extra session for June ended on July 19 without passing any bill.
Due to a protracted parliamentary deadlock, an extra budget bill was passed almost 100 days after the government submitted it to the assembly. (Yonhap)