[Public Voices] Next Year's Budget Proposal Must Be a 'Livelihood-Responsible Budget'

The government's budget proposal for 2025 has been released. While the final approval by the National Assembly remains to be seen, the total expenditure is set at 677.4 trillion won, an increase of 3.2% or 20.8 trillion won compared to last year. Some media outlets have described this as a modest budget or a high-intensity austerity budget, citing the total expenditure growth rate of only 3.2%.

Viewing the '3.2% total expenditure growth rate' as low is biased. In 2010 and 2016, the total expenditure growth rate was even lower at 2.9%. The increase of 20.8 trillion won in total expenditure is the largest amount in 18 years from 2000 to 2017, except for the 27.3 trillion won increase immediately after the financial crisis in 2009. Compared to the Moon Jae-in administration, where the total expenditure budget increased from 400 trillion won in 2017 to 607 trillion won in 2022, averaging 40 trillion won annually, this is smaller but close to the 20-year average increase of about 24 trillion won. Therefore, it is unreasonable to belittle it as a high-intensity austerity expenditure.

The 9% annual increase in total expenditure during the Moon Jae-in administration is unsustainable. The nearly 6% average annual increase under the Lee Myung-bak administration and 4% under the Park Geun-hye administration are now difficult to endure. While the national debt was only 400 trillion won during the Lee Myung-bak administration and 630 trillion won during the Park Geun-hye administration, it has now exceeded 1,100 trillion won, and the government must pay 30 trillion won annually in interest?more than the annual salary of national public servants. Controlling expenditures to maintain fiscal soundness is a proper duty of the state and a natural responsibility of the government. In this regard, prioritizing fiscal soundness recovery as the most important fiscal principle is entirely appropriate.

The problem is that the livelihood of the people is difficult, and the government's role has become more important than ever. The government is also seriously aware of this. However, unlike in the past, the government evaluates whether the livelihood support methods of previous administrations were effective relative to their costs and prepares the expenditure budget based on thorough reflection. During the five years of the Moon Jae-in administration, total expenditure, including supplementary budgets, was about 2,700 trillion won, and a significant portion was nationwide livelihood support, yet fundamental livelihood difficulties were not resolved.

This fact proves that government livelihood measures are more efficient when targeted and customized for necessary groups, i.e., vulnerable groups, rather than for the entire population. The 2025 budget for health, welfare, and employment increased by 4.8%, or 11.4 trillion won, from last year, reaching a record high of 249 trillion won. This reflects the government's philosophy of selecting and focusing on expanding welfare for the vulnerable.

For example, 850 billion won will be invested to raise the annual livelihood benefit for a family of four by 1.41 million won, and 220 billion won will be allocated to create 1.1 million jobs for the elderly. The national scholarship support target will expand from 1 million to 1.5 million people. The salary for enlisted soldiers will increase from 1.25 million won to 1.5 million won for the rank of sergeant, and including the matching support for the Tomorrow Preparation Savings for Soldiers, it will rise to 2.05 million won. Five hundred million won will be newly invested to establish an emergency care system for people with severe developmental disabilities.

Of course, these policies cannot completely resolve livelihood issues. More resources are needed to address new livelihood fiscal demands, but national tax revenues such as corporate tax and inheritance tax are decreasing, and income tax growth is slowing. Therefore, enhancing the efficiency of all fiscal projects through fiscal management innovation, as in this budget proposal, will be the government's greatest challenge. It is hoped that the National Assembly's budget review process will also skillfully manage fiscal operations to prepare a livelihood-responsible budget that solves livelihood problems.

Shin Se-don, Professor Emeritus at Sookmyung Women's University