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National Assembly passes 2018 budget bill Updated: 2017-12-06 19:59:51 KST


The National Assembly passed the 2018 budget proposal early Wednesday, four days after the legal deadline.
The spending plan, worth nearly 400 billion U.S. dollars, will be directed at creating thousands of new government jobs, boosting welfare, as well as cushioning the effects of a big minimum wage hike.

"Of the 178 lawmakers present, 160 voted in favor of the bill. Fifteen voted against and there were three absentee votes."

The vote itself was delayed for hours due to the main opposition Liberty Korea Party showing up late as well as heated debates during the plenary session.
The conservative party in the end decided not to vote at all -- in protest against key contentious issues despite a tentative agreement reached between the three main parties earlier in the week.
However, cooperation from the center-left People's Party was enough to get the bill through.

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The tough passage reaffirmed the hurdles faced by the ruling Democratic Party of Korea in the opposition-led parliament, at the same time -- it showed the growing influence of the People's Party in legislative affairs as the party with the deciding vote.

Based on the parties' agreement, the budget will be used to add 9,475 new jobs in the public sector next year.
It's less than the what the ruling party wanted, but the conservative party had demanded further cuts.
It also includes measures to help small businesses cope with next year's 16 percent minimum wage hike, while also offering expanded childcare benefits and a rise in basic pensions.
Also passed was a revised tax code bill, another area the main opposition is contesting.
It calls for a hike in the corporate tax rate to 25 percent for businesses with taxable profit of more than about 275 million dollars, and it slaps a 42 percent tax on individuals whose income exceeds 460-thousand dollars a year.
While the general consensus is that next year's budget will help ease the burden on the vulnerable, experts are calling for a different strategy in the long run.

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"If the budget is used to bankroll the minimum wage hike or to support the cost of new public sector jobs -- it could cause problems because those are are ongoing programs. While the government can raise taxes, should they continue to spend like this, it could hurt the country's fiscal soundness and in turn lead to a contraction in the private sector."

It remains to be seen how the political parties will mend their ties after the budget clash, but for now, the bill's passage will allow the Moon Jae-in administration to get its agenda rolling.
Kim Min-ji, Arirang News.
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