Government Tightens Belt... "Focusing Fiscal Capacity on Key Government Tasks"

First Financial Management Strategy Committee Meeting Held on the 17th
The Top Priority of Fiscal Policy is 'Sound Fiscal Management'

Choi Sang-dae, Vice Minister of Strategy and Finance, is delivering the opening remarks at the '2023 1st Fiscal Management Strategy Committee' held on the 17th at the Korea Trade Insurance Corporation in Jongno-gu, Seoul.

[Asia Economy Sejong=Reporter Song Seung-seop] The government is tightening its budget belt. Going forward, fiscal policies will be created and implemented with a focus on soundness. Efforts will also be made to reduce unnecessary budgets and establish fiscal rules.

On the 17th, Choi Sang-dae, Vice Minister of the Ministry of Economy and Finance, chaired the ‘2023 1st Fiscal Management Strategy Committee’ at the Korea Trade Insurance Corporation in Jongno-gu, Seoul, and revealed the government’s fiscal policy direction plan. The government will operate fiscal policies according to the ‘four major frameworks (establishing a sound fiscal stance, accelerating fiscal innovation, supporting the overcoming of urgent livelihood and economic difficulties, and finalizing and actively promoting Fiscal Vision 2050 in the first half of the year).’

This committee meeting was the first held this year. It was convened to review and discuss the fiscal achievements and future policy directions since the new government’s inauguration last year, and to examine the ‘12 Key Fiscal Projects Performance Management Plan’ reported at the Cabinet meeting in January.

The committee set establishing a sound fiscal stance as its top priority. It plans to establish an institutional foundation for strong expenditure restructuring and soundness management. Low-performance, similar, and overlapping projects will be restructured, and mandatory and rigid expenditures will be re-examined from the ground up. Along with strong expenditure restructuring, efforts will focus on the prompt passage of the fiscal rules bill in the National Assembly.

Additionally, the committee decided to create tangible results through fiscal innovation. It will streamline the preliminary feasibility study system and push for the passage of related laws to activate private participation in the development of state-owned properties. Budget execution will be accelerated to respond to economic trends, with a front-loaded approach. A total of 340 trillion won will be invested in fiscal, public investment, and private sectors in the first half of the year. Projects such as job creation and livelihood stabilization will be designated as separate management targets and monitored more intensively.

‘Fiscal Vision 2050,’ established at the National Fiscal Strategy Meeting in July last year, will be finalized in the first half of this year and actively implemented. Opinions will be gathered not only from related ministries but also from experts, the general public, and the 20s and 30s generations. Tasks confirmed as part of the fiscal vision will be reflected in future budget formulations.

The 12 key fiscal projects will proceed by forming a performance management team this month, followed by a kickoff meeting next month to set performance indicators and goals. The fiscal performance review meetings will be held as needed. The 12 key fiscal projects refer to important fiscal projects reflecting the national vision. The Ministry of Economy and Finance is currently establishing a performance management plan to achieve early results in projects with high public impact.

Vice Minister Choi Sang-dae emphasized, “As we enter the second year of the Yoon Seok-yeol administration, the role of fiscal policy is crucial for producing substantial national governance outcomes,” and added, “Going forward, fiscal capacity will be fully concentrated to support the government’s key tasks, including the three major reforms in labor, education, and pensions.”