Opposition, Standing Committees Slash Budgets Unprecedentedly... 'Inevitable Obstacles in Budget Review'

Analysis of 8 Standing Committee Review Reports
Reduction Amount Exceeds Three Times Last Year
Opposition: "Boldly Cut Unnecessary Budget"

The main opposition party has launched an unprecedented budget cut against next year's budget proposal. The government’s budget was significantly reduced by each standing committee. Since the budget cuts made at the standing committee level must be respected by the Special Committee on Budget and Accounts, it is expected to become a contentious issue during the overall budget review.

On the 21st, Asia Economy analyzed reports from eight standing committees, including the Culture, Sports and Tourism Committee, which disclosed detailed review items through the budget review report for next year (the 2025 budget proposal). Compared to this year (the 2024 budget proposal), it was found that unprecedentedly severe budget cuts were made. Typically, standing committee reviews have focused on increasing budgets, considering the circumstances of the relevant ministries and the desired projects of lawmakers, but this year’s atmosphere is different.

Currently, nine standing committees in the National Assembly have released preliminary review reports. However, excluding the Political Affairs Committee, which did not prepare a preliminary review report for 2024, the total amount of cuts by the eight standing committees reached 799.8 billion KRW. This is more than three times the total cut amount of 252.7 billion KRW from this year’s preliminary review results by the same committees. Although it has not gone through a plenary session resolution, the Planning and Finance Committee also cut 2.4 trillion KRW from a 4.8 trillion KRW contingency fund at the budget and accounts subcommittee stage. Including this, the scale of budget cuts by standing committees this year is at a record level. Typically, standing committee budget reviews result in more increases than cuts, leading to an overall increase when passed to the Budget and Accounts Committee, but this year, the Judiciary Committee’s budget was reviewed with a net cut.

National Assembly budgets are preliminarily reviewed by each standing committee, where ruling and opposition parties and related ministries exchange opinions to organize increases and cuts by project before sending them to the Budget and Accounts Committee. The Budget and Accounts Committee then reviews the budget based on this content. According to Article 84 of the National Assembly Act, if the budget is cut, increasing it again requires the consent of the relevant standing committee. Therefore, in the case of the Judiciary Committee, which cut 8 billion KRW from the prosecution’s special activity expenses and 50.7 billion KRW from specific task expenses, any compromise at the Budget and Accounts Committee level to partially restore the budget would require the Judiciary Committee’s consent. This year, budget reviews by standing committees were fierce even at the subcommittee level because, instead of moderate compromise among lawmakers, the opposition party aggressively cut the budget.

The opposition party’s enthusiasm for budget cuts is interpreted as a determination to take the lead in next year’s budget review. Earlier, Yoon Jong-gun, the floor spokesperson for the Democratic Party of Korea, stated, “We will firmly establish the National Assembly’s budget review authority by boldly cutting unnecessary budgets without being bound by deadlines.”

Lee Sang-min, senior research fellow at the National Fiscal Research Institute, explained, “Even if the Budget and Accounts Committee tries to restore the cut budgets by standing committee, there is no way if the relevant standing committee refuses to reapprove. However, if the budget proposal is processed in the form of an amendment at the plenary session, it can be increased without the standing committee’s consent.”

Meanwhile, the remaining budget review is also facing difficulties. Both ruling and opposition parties intend to complete the review by this week for each standing committee. However, the Budget and Finance Committee’s review has been suspended, and the Steering Committee is currently in a dispute over the full cut of special activity expenses budgets for the Presidential Office and the Board of Audit and Inspection, among other issues.