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Welfare Budgets Are Leaking Elsewhere

Posted June. 07, 2005 06:34,   


Welfare budgets are leaking. In other words, the taxes are being used to support extravagant objects or are being wasted due to mismanagement.

According to the "National Budget Management Plan of 2005 to 2009" propounded by the Ministry of Planning and Budget, the government`s spending on social welfare will increase 42.7 percent from this year`s 48.7 trillion won to 69.5 trillion won in 2009.

Nonetheless, it is difficult to find any discussion on how to manage this money. Experts point out that the government should caulk leaks before increasing the budget.

Public investment management research director Moon Hyeong-pyo of the Korea Development Institute (KDI) said, "We estimate that advanced nations including the United States and Britain misuse 20 percent of their welfare budgets due to errors in selecting beneficiaries. Much more money would be wasted in Korea which has difficulties in post-management."

The Ministry of Health and Welfare exposed 4,051 households which received government subsidies of 6.9 billion won from October 2000 to December 2004 despite earning more than the minimum living costs each year by registering themselves as eligible for receiving national basic living guarantee through using false documents.

In addition, it was recently discovered through the Board of Audit and Inspection`s investigation on the settlement of accounts of 696 nursing homes including hospitals and clinics in 2003 that 535 institutions requested excessive insurance claims amounting to 12.488 billion won.

Professor Park Neung-hoo (social welfare) of Kyonggi University remarked, "It is difficult to retrench welfare budgets once the government increases them. Although it might mean more costs for post-supervision, it is crucial to establish complementary devices such as minutely examining whom to assist."

Chang-WonKim legman@donga.com changkim@donga.com