Parliament passes 2018 government budget proposal

The National Assembly passed next year‘s government budget proposal of 428.8 trillion won ($394.5 billion) Wednesday, amid objections from the main opposition party which had demanded the reduction of new public service jobs to be created.

In the plenary session, 160 of the 178 Assembly members voted in favor of the budget bill, with 15 lawmakers against and 3 abstained. The National Assembly has 298 members.

Most of lawmakers from the ruling Democratic Party of Korea with 121 parliamentary seats and minor opposition People’s Party with 39 seats supported the bill, while the 116-lawmaker main opposition Liberty Korea Party refused to attend the voting session.

The passage of the first budget bill proposed by the Moon Jae-in government came four days after the unicameral house missed the legal deadline of Dec. 2 due to differences among political parties on the government plan to create thousands of new public jobs and raise the corporate tax.

The original budget bill proposed spending 534.9 billion won to support Moon‘s plan to create 174,000 jobs by 2022 and about 3 trillion won in subsidies to ensure the job security of workers who may face dismissal following next year’s minimum wage hike. In July, the government decided to raise the minimum wage to 7,530 won per hour, a whopping 16.4 percent on-year increase.

Opposition parties had sought to reduce the number of public jobs to be created, believing a drastic increase would financially burden future generations.

At Monday’s meeting, the parties agreed to reduce the number of new jobs for next year to 9,475 from the original 12,221 jobs set by the ruling party and the Moon government.

With the passage of the budget bill, the government will be able to dole out a monthly allowance of 100,000 won to each household with a child under 5 years old from September and raise the basic monthly pension for poor senior citizens of 65 years and older from 206,000 won to 250,000 won.

The rival parties also agreed to increase the tax rates applied to corporations with annual taxable profits of more than 300 billion won to 25 percent from the current 22 percent.

The income tax rate is also to be raised from the current 38 percent to 40 percent for individuals who annually earn between 300 million won and 500 million won.

By Jo He-rim (herim@heraldcorp.com)