Nat`l welfare budget to hit record W100 bln next year

Korea’s national welfare budget for next year will top a record 100 trillion won (89 billion U.S. dollars). Eleven trillion won (9.8 billion dollars) of budget will be spent on projects to provide jobs to cope with the economic recession.

Next year’s state budget was set at 342.5 trillion won (310 billion dollars), up 5.3 percent from this year. The per capita tax burden, including national and other taxes, will reach 5.5 million won (4,900 dollars), up 250,000 won (223 dollars) from this year.

A Cabinet meeting on Tuesday decided to submit to the National Assembly a 2013 budget plan reflecting these and other figures and a 2012–16 mid-term state budget management plan by next Tuesday.

By area, the budget for health, welfare and labor came to 97.1 trillion won (87 billion dollars), up 4.5 trillion won (4 billion dollars) or 4.8 percent from this year. If the 5.5 trillion won, which has been subtracted from this budget item to the private sector due to entrustment of part of fiscal lending projects, is included, welfare spending next year will hit 102.6 trillion won (90 billion dollars), jumping 10.8 percent from this year. Welfare expenditures have surged since exceeding 50 trillion won (45 billion dollars) for the first time in 2005, and have doubled over the past eight years.

The budget for jobs was set at 10.8 trillion won (10 billion dollars), up 8.6 percent from last year (9.9 trillion won or 8.8 billion dollars). As a result, the number of jobs to receive government subsidies next year will increase to 590,000.

Funds for social overhead capital were set at 23.9 trillion won (21 billion dollars), up about 800 billion won (715 million dollars) from this year, which is its first increase since 2009.

A source at the Strategy and Finance Ministry said, “The measure is designed to minimize impact of the global financial crisis on the job market and the regional economy.”

jarrett@donga.com