[Editorial] Budgetary Policies Will Work up to Expectations?

The government has decided on a budget bill for next year whose size reaches up to 112 trillion won (approximately $1 billion). But it is likely that the budget plan will end up a temporary one unlike in other fiscal years. Many unpredictable variables may determine the future of the budge plan. For example, a new government is to be launched, and US may attack Iraq. Thus, more than ever, the role of budgetary policies is important.

The government points out that the budget will be balanced for the first time in 6 years after the economic crisis. As promised, issuance of national bonds, which has continued for the past five years, will be discontinued. But the economic situations for next year would not leave us just satisfied with the balanced budget. Actually, they are dire, to say the least.

Kim Dae Jung administration predicts that our economy would increase by 8-9%. But the administration should know better. The world economy, as a whole, stands opposite what the administration expects it to stand. It is uncertain whether US would really attack Iraq. In the meanwhile, due to the uncertainty, the oil prices around the world are increasing sharply and the stock prices have plummeted worldwide. In short, the future of next year’s world economy is extremely uncertain.

As our economy is getting deeper into deflation, it will be damaged severely since it has been supported by hyper-consumption by customers and by artificial stimulation packages of the government. If the economy fails to develop as expected by the government next year, the idea of the balanced budget will be put away and additional budgets shall be come up with.

Nowhere In the current budget bill are found any contingency measures for a sluggish economy next year. The function of the financial sector has already been weakened remarkably. If the government fails to monitor the market as well, the economy would nose-dive out of control. The government should ponder over whether it is time for the government to assume an active role.

The total amount of tax each citizen has to pay next year will be over the 3 million won line. Nonetheless, the government keeps arguing that the burden has not been made heavier. But, if the economy develops less than expected, the burden will get heavier. Under these circumstances, the government has announced that it would raise the salary of the government workers by 5.5%, which is 0.5% higher than that corporate employees would receive next year. How could we understand this? The government should have adjusted the pay raise in such a way that the total cost of the government would have been decreased. The salaries of the government workers have reached up to the level of their counterparts in non-governmental sectors.

Congress, which will review the budget bill, should do its role. If it passes the bill, which the government has haphazardly produced, due to the upcoming presidential election, a national disaster is likely to occur. To make the budget help the public relieved and the national competitiveness increased, Congress should look into every corner of the bill.