South Korea passes record $516.3 billion budget cope with Covid fallout

The National Assembly passed the 2022 government Budget Friday, a record high amount of US$516.3 billion to cope with the economic fallout of the Covid pandemic and other expenses

The National Assembly passed the 2022 government Budget Friday, a record high amount of 607.7 trillion won (US$516.3 billion) to cope with the economic fallout of the Covid pandemic and other expenses.

The Bill's passage came a day after the legal deadline, as last-minute negotiations between the ruling Democratic Party (DP) and main opposition People Power Party (PPP) caused a delay in the finance ministry's computation work, reported Yonhap news agency.

The final package is an increase of 3.3 trillion won from the government proposal, the second consecutive year the Budget has been expanded by the Assembly.

The Bill passed 159-53, with 24 abstentions, in an Assembly where the DP holds a majority of 169 out of 295 seats.

The PPP refused to endorse the Budget after objecting to the defence ministry's request for 7.2 billion won to build a light aircraft carrier. The full amount was restored after initially being slashed by the parliamentary defence committee.

Next year's Budget includes 68 trillion won worth of support measures for small businesses hit by the pandemic.

The DP raised the minimum compensation for business losses from the current 100,000 won to 500,000 won, although the PPP had called for an increase to 1 million won.

Businesses that do not qualify for the compensation, such as the tourism, sports and culture sectors, will be offered separate support measures worth 400 billion won.

The total value of local currency coupons to be issued next year was raised from the government's plan of 6 trillion won to 30 trillion won.

The government will also offer 36 trillion won in loans to 2.13 million small business owners at ultra-low annual interest rates of around 1 per cent.

In other expenditures, the budget for antivirus health care was increased by around 1.4 trillion won to more than 7 trillion won.

The money will be spent on purchasing oral Covid-19 medication for 404,000 people, securing 14,000 more hospital beds for critically ill Covid-19 patients, and supporting people with adverse reactions to coronavirus vaccines.

Also included in the Budget are additional funds for child care services, funds to establish a response system to supply chain risks, such as the recent shortage of urea solution, and an increase in local subsidies following an increase in tax revenues.

--IANS

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