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[Editorial] Government Negligence Revealed in Miscalculated National Budget

[Editorial] Government Negligence Revealed in Miscalculated National Budget

Posted September. 08, 2007 06:55,   


On August 23, the ministry of finance and economy announced that the consolidated budget in the first half of the year had a budget deficit of 6.1 trillion won, the largest amount recorded since the Asian financial crisis in the late 1990s.

Presently, the ministry is reversing its announcement by saying, “We made a mistake; we have corrected the figure to a surplus of 25.5 trillion won.” The miscalculation amounts to as much as 31.6 trillion won. A management balance, which deducts social security-related funds from the consolidated balance, suggests a broad picture of how the administration is running the country’s finances. The agency also revised the figure from the deficit of 22.571 trillion won when it reported figures on August 23, to 5.1 trillion in the red on September 7, which indicates an error margin of 17.471 trillion won.

The ministry blames its newly introduced automatic budget calculating system for the errors. However, the public will not be deceived by its excuses given that the size of money was grossly inaccurate and that the ministry in charge of the nation’s financial administration even failed to catch the glitch in the monthly statistics. The ministry’s high-ranking officials ranging from the head of the department to the finance minister should take complete responsibility for their carelessness and negligence.

The largest miscalculated figure comes from the government’s personnel expenditures, which was incorrectly recorded in the system from an original figure of 10.7 trillion to 27.3 trillion won. If the mistake were made by a private business, the company would not survive in the competitive market. The Roh administration has steadily increased the number of public officials by 57,534 over the past four and a half years, and it has turned a deaf ear to the growing criticism for its excessive employment. It defended its position by saying, “What is important for a government is running state affairs effectively regardless of its size.” The government policy is going against an international trend of streamlining government structure.

This is not the first time that the incumbent government has made a mistake in managing statistics. Based on false figures that claimed that the top 1.3 percent of the rich own 65 percent of the nation’s land, it has pushed for real estate policies that do not adequately reflect the market. The government also introduced improper regulations, failing to grasp current housing trends and miscalculating housing supply. Moreover, the government had to admit its faults when it was disclosed that it tried to exaggerate its policy effects based on incorrect or biased figures.

According to the over-calculated statistics, if the government estimated that the collected tax revenue would be 11 trillion won larger than expected, the public would be greatly burdened. The government should bear in mind that its lack of consideration when it comes to financial management could make people’s lives even more trying.