Cost of Korea’s 25-Year Plan Released

According to data, the Korean government estimated additional financial resources necessary for its Vision 2030 future strategy report to be 1,600 trillion won. This figure is 500 trillion larger than officially announced by the government.

According to the Government Information Agency’s data obtained by Dong-A Ilbo yesterday, the government said on August 30 when it announced Vision 2030, “We put our estimate of the additional financial resources necessary at 1600 trillion won over the next 25 years” in the document stating: “An additional 1,600 trillion won for Vision 2030” posted on the briefing board of the Government Information Agency’s web site. This data was removed in the afternoon on the release day.

But the government revealed on an official announcement and presidential report of the Ministry of Planning and Budget (MPB) that some 1,100 trillion won is additionally needed for Vision 2030 over the next 25 years from this year to 2030. Given that, questions are likely to be raised over the possibility that the government intentionally announced smaller figures than actually needed funds due to concerns over tax increases.

What amount of funds is actually needed?

The official amount of additionally necessary funds revealed by the MPB is 1,100 trillion won. However, the ministry once added that the number can go up to 1,600 trillion won considering the interest rate of government debts during a reporters’ additional coverage session after a briefing. Jang Byung-wan, the minister of the planning and budget, appeared on a KBS radio show on September 4 and stressed the necessity of Vision 2030 that the additional funds were 1,100 trillion won.

But an original briefing of the Government Information Agency revealed the additional funds at 1,600 trillion won.

According to the briefing, the government also said financial resources need up to 3.0 percent of average GDP every year to pursue Vision 2030. But it explains the figure is tantamount to 2.0 percent of average GDP since its official announcement August 30.

The plan to finance it is also periodically different.

The official announcement by the MPB estimated it at 4.0 trillion won from 2006 to 2010 and at 1,096 trillion won from 2011 to 2030. However, at the briefing, the number was put at 4.0 trillion won during the period of 2006 to 2010, 300 trillion won from 2011 to 2020, and 1,300 trillion won from 2021 to 2030. In particular, the period of 2021 to 2030, the most cash-strapped period, the funds supplement is likely to be borne by the people now in their 20s and 30s. The government has set a long-term operation plan of the fund by 2030 with considering of the fund’s depletion.

According to its calculation, total spending over the next 25 years is likely to be 10 quadrillion and 2,200 trillion won until 2030 considering of future GDP growth, and it is likely to be 10 quadrillion and 3,800 trillion won with additional funds of 1,600 trillion won for Vision 2030.

How much will it cost the public?

Data on state affairs also predicted the burden of the public according to the way to raise the fund. In the projection, the amount of the estimated 1,600 trillion won is a standard to calculate. When some 1,600 trillion won is raised by national bonds, the tax burden of the people will keep the current level of 20 percent, but the ratio of national debt to GDP is likely to rise to 70 percent from 32.3 percent.

When the fund is financed only by taxes, the tax burden will increase to 24 percent in 2030 from 19.7 percent of 2006. When both of national bonds and tax burden are combined to fund it, the ratio of debt to GDP will rise to 40 percent from 32 percent, and tax burden will increase from 19.7 percent to 23 percent.

Lee Soo-won, MPB director of finance policy division, said, “We once reviewed the proposal of 1,600 trillion won for Vision 2030. But the budget was finally agreed to be 1,100 trillion won.” “It seems that the Government Information Agency made the briefing including the original budget proposal, not a final one,” he explained.

However, Kang Ho-cheon, manager of the public relations supporting division under the government information agency, responded to the contrary, saying, “We posted the very data given from the MPB, the very task force department of Vision 2030.

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