New politics means no more pork barrel projects

The Korea Development Institute has lowered Korea’s economic growth target for next year from 3.4 percent to 3.0 percent, or one percentage point lower than the growth forecast of 4 percent set by the government when setting next year’s state budget. The National Assembly Budget Office predicted that if economic growth reaches just 3.5 percent next year, national tax revenue will see a shortfall of 2.3 trillion won (2.1 billion U.S. dollars) from the government’s estimate. An economic slump means revenue sources will decline, but the funds the government needs to spend to shore up the economy will increase. Korea should minimize essential expenditures as much as possible to prepare for a crisis, but focus on spending in areas that will revitalize the economy, including job creation and employment assistance service.

The National Assembly has hardly displayed a sense of crisis or serious consideration for administration in the way it reviews next year’s state budget. Parliament has merely continued the outdated practice of increasing the pork barrel budget to resolve civil complaints in lawmakers’ constituencies and deliver on welfare pledges they made for the April 11 general elections ahead of the Dec. 19 presidential election. According to the National Assembly`s Special Committee on Budget and Accounts, all 12 parliamentary standing committees have demanded a hike of a combined 12 trillion won (11 billion dollars) in next year’s budget. In comparison, they only demanded a cut of 1 trillion won (900 million dollars) in the government budget. The legislature should focus on reducing waste of taxpayers’ money, but has added to the budget rather than cutting it. The Land, Transport and Maritime Affairs Committee demanded an additional 3.86 trillion won (3.56 billion dollars) in next year’s budget, mostly to support pork barrel projects in lawmakers’ constituencies. The Health and Welfare Committee demanded 2.57 trillion won (2.37 billion dollars) more for use in free childcare services, payment of child rearing subsidies, and a hike in basic pension for senior citizens despite the health minister’s objection.

With rival parties locking horns, they will likely form belatedly a budgetary figure adjustment subcommittee under the Special Committee on Budget and Accounts again this year, and will also fail to approve next year’s budget by the legal deadline (Dec. 2) again this year. Since the National Assembly does not play its due roles, government ministries are instead striving to keep in check pork barrel budget bills and “memo budget items (pork barrel-purpose budget plans for constituencies that are proposed in memos to the special budget committee) in the political circle. Former minister Choi Jong-chan who co-heads the Sound Government Finance Forum said, “Korea needs to define the caps on permissible fiscal deficit and the value of government bonds issued, and to make it obligatory to estimate additional fiscal budget for bills that will entail extra budgetary spending."

Presidential candidates are making blank pledges to restructure government spending to mobilize funds to use on welfare spending while ignoring the outdated practice of “memo budget” and belated deliberation of budget plans, something that has been repeated year after year. With independent candidate Ahn Cheol-soo dropping out of the presidential race, the portion of swing votes has increased from about 10 percent to 20 percent. Ruling Saenuri Party candidate Park Geun-hye and her main opposition rival Moon Jae-in are trying to garner support from swing voters, who have yet to find their candidate of choice, by pledging political reform and renovation. Instead of getting rid of ill-advised practices in politics, they seem to focus on “garnering votes from among former supporters of Ahn.” The candidates should keep in mind that what they call new politics starts with eradicating pork barrel memo budget items sought by lawmakers.