Gwangju City Holds Legislative Council Meeting on Financial Strategy and Supplementary Budget
Gwangju Metropolitan City and the City Council have joined forces to overcome the financial crisis caused by the realization of decreased tax revenue.
On the 22nd, Gwangju announced that it held the ‘Gwangju City Financial Strategy and Supplementary Budget-related Legislative Council’ with the City Council leadership at the City Council's main conference room.
Gwangju shared the internal and external financial crisis situation due to the expected decrease in national and local taxes, explained countermeasures, and requested cooperation from the City Council.
The city forecasted that the economic trend for 2023, initially predicted as sangjeohago (a phenomenon where the economy is sluggish in the first half of the year and picks up in the second half), is expected to continue with slow consumption recovery and ongoing economic uncertainty due to persistent real estate market downturn, export sluggishness, and US-China tensions.
Furthermore, Gwangju reported that the economic growth rate projected by various government agencies this year is between 1.4% and 1.6%, significantly down from last year's 2.6%. National tax revenue until April is 134 trillion won, a decrease of 33.9 trillion won, and local tax revenue in the first quarter is 23.6 trillion won, down by 2.2 trillion won, indicating a severe deterioration in the financial conditions of both the government and local governments.
The city and the City Council agreed to jointly respond to the financial crisis caused by the realization of decreased tax revenue and to take the lead in overcoming the economic crisis. They also discussed specific expenditure restructuring plans to implement fiscal austerity.
Earlier, on the 15th, Gwangju announced concrete expenditure restructuring measures through a financial strategy meeting, including ▲ comprehensive review of all projects ▲ reduction of current expenses ▲ improvement of private sector transfer expenses ▲ adjustment of autonomous district burden rates ▲ avoidance of indiscriminate public contest projects ▲ efficient management of funds.
These measures will be applied first to the second supplementary budget scheduled for July, implementing bold expenditure restructuring such as rescheduling large-scale projects, reducing current expenses, and changing project plans, while cutting and redistributing an existing budget of 46.8 billion won.
However, Gwangju plans to issue local bonds for active fiscal spending within an appropriate debt ratio to overcome the financial crisis, ensuring that essential projects such as new economic initiatives, small business support, and care services are not disrupted, as it believes that a budget focused solely on austerity could risk losing growth momentum.
Jeong Muchang, Chairperson of the City Council, said, “Since a decrease in tax revenue due to economic recession is expected to cause many difficulties in budget management, I hope that countermeasures such as securing national funds and adjusting expenditures are well prepared. Please make every effort to reflect this in the government budget and carefully review the necessity of government contest projects funded by city funds. The City Council will actively cooperate in revitalizing the economy for the happiness of citizens.”
Kang Kijung, Mayor of Gwangju, stated, “Both the central and local governments are facing difficulties due to the realization of decreased revenue. Given the shortage of resources, this supplementary budget will prioritize indispensable projects. Since both addressing the hardships of the livelihood economy and securing fiscal soundness are important issues, we will join hands with the City Council, our partner in city administration, to pool wisdom to overcome the waves of economic and financial crises.”
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