Finance Minister Hyun Oh-seok said Wednesday that the government plans to submit its bill proposing additional funds to the National Assembly next week.
“We will submit the supplementary budget bill for National Assembly approval by the end of April after a Cabinet meeting next week,” said Hyun, also the country’s deputy prime minister, in a meeting with economic-related officials.
The ministry said it will finalize the size of the budget with political parties and try to speed up its efforts to use the extra funds for the well-being of the middle class. Market analysts suggest that the government could seek between 10 trillion won and 17 trillion won ($8.8 billion-$15 billion).
This budget scheme comes as the country has been heading down on a low-growth path despite optimism over a global economic recovery led by the U.S.
Deputy Prime Minister and Finance Minister Hyun Oh-seok (left) speaks at the first meeting of economic ministers in 15 years at the government office building in Seoul on Wednesday. (Ahn Hoon/The Korea Herald)
Hyun said that Korea is facing further hardship as it postponed liquidation of its state-invested equities and expects lower tax revenues due to the slowdown on projections of 2.3 percent growth this year, down from its initial estimate of 3 percent.
The planned supplementary budget will be spent on supporting tech venture start-ups by young entrepreneurs in line with President Park Geun-hye’s “creative economy” vision through promoting the convergence of IT and science.
It will also be allocated toward improving the distribution channels of the country’s agricultural products for price stabilization, as well as to revive the sluggish housing market and boost counter cyber terrorism.
The deputy prime minister said that it seeks a National Assembly approval on its recently proposed real estate measures by the end of this month for implementation in the second half of this year for first-time apartment buyers or lower-income households.
The scope of capital gains tax cuts and other deregulation will be further discussed and finalized with lawmakers, he noted during the meeting.
The ministry said that North Korea’s threats have very limited effect on the South Korean economy.
However, the North’s provocations could undermine the South Korean economy should the actions continue over a long period of time.
Nonetheless, South Korea is capable enough to counter the North and stabilize its market through effective monetary and fiscal policies, it said in a statement.
The Finance Ministry will monitor the market around the clock and use necessary measures to buffer any volatility in tensions between the two Koreas.
By Park Hyong-ki (hkp@heraldcorp.com)
