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Korea's basic budget priorities will shift from welfare, which has been dominant in the last 10 years, to growth.
In draft budget guidelines for 2009 released on Tuesday, the Ministry of Strategy and Finance said, "The government decided to curb an increase in the welfare budget from next year but increase budget in sectors that can expand growth potential including research and development and the cultural content industry."
The government will begin increasing investment in R&D gradually from 2009, and increase its budget to 1.5 times this year's W10.8 trillion or W16.2 trillion by 2012 (US$1=W1,001).
In a briefing, Second Vice Finance Minister Bae Kook-hwan said, "The Roh Moo-hyun government focused on expanding welfare spending to close the wealth gap. But the Lee Myung-bak administration will carry out its budget plans under the three principles of growth promotion, preparation for the future, and sustained investment." These principles will be maintained for the entire five-year term of the Lee administration, he added.
The annual average rate of increase in spending on social welfare and health over the past five years was 11.3 percent, far higher than the 7 percent rate of increase in overall expenditure.
A Finance Ministry official said, "The welfare budget has increased at a rapid pace, causing some inefficiency in some parts of the welfare sector. As a result, the fiscal deficit has been expanded." However, the government pledged to moderate the increase rate of expenditure rather than cutting welfare expenditure from the current level.
(englishnews@chosun.com )
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