The government has launched a task force to study the feasibility of a recent spate of welfare proposals floated by politicians amid worries that many of them are just intended to woo voters ahead of major elections.
Korea is to hold parliamentary and presidential elections in April and December. Political parties are rushing to unveil welfare programs and campaign pledges, many of which policymakers see as “populist” and fiscally “unsustainable.”
“From the perspective of fiscal authorities, it is challenging to accept the pledges unveiled by the political circles,” the Finance Ministry said in a press release. “If we accept all of those proposed welfare programs, it would seriously hurt our fiscal sustainability.”
“It is inevitable to raise taxes or issue additional government debt to carry out large-scale welfare programs ... That would end up increasing the tax burden or transferring the current generation’s responsibility to future generations,” it added.
The task force is aimed at minimizing such side effects that could be caused by reckless campaign pledges, while looking into their long-term sustainability, the ministry said.
It will be chaired by Vice Finance Minister Kim Dong-yeon, who is in charge of the ministry’s budget affairs, and attended by senior finance ministry officials. The results of discussion at the monthly meetings of the task force will also be reflected in the government’s future budget proposals, it added.
The move comes amid growing welfare demand at a time when the country’s population is fast aging and birth rates remain chronically low, which would result in a shrinking workforce and more burden on a smaller group of people to support senior citizens and underprivileged people.
Welfare, however, has become a political issue recently as lawmakers apparently are trying to use it as a way to get an upper hand in the upcoming elections. Policymakers have objected to what they see as a “reckless” expansion of benefits, expressing concerns about its impact on the country’s overall fiscal soundness.
The government forecast that it will cost up to 340 trillion won ($303.3 billion) over the next five years to carry out all the welfare-related proposals unveiled by the political circles.
The finance ministry, meanwhile, sets aside 92.6 trillion won for welfare programs in its 2012 budget, up from the previous year’s 86.4 trillion won. The amount accounts for 28.5 percent of the government’s total annual expenditure plan for this year, according to the ministry.
(Yonhap News)
