[Exclusive] Rushed Budget Bill Timeline to Be Advanced... People Power Party Proposes Amendment to National Finance Act

Deadline for Reporting Budget Formulation Guidelines to the National Assembly Set for April
Submission of National Fiscal Management Plan Moved Up from September to June

The People Power Party is set to propose a bill to advance the budget review timeline in order to prevent the hasty passage of budget bills that occurs every year. The bill would require that budget formulation guidelines be reported to the National Assembly by April each year, and the National Fiscal Management Plan by June.

According to political sources on December 16, Assemblywoman Kim Mi-ae of the People Power Party plans to soon sponsor an amendment to the National Finance Act reflecting these changes.

The budget process begins with the government's budget formulation. Each ministry submits a medium-term business plan to the Ministry of Economy and Finance by the end of January each year. Based on these plans, the government establishes the National Fiscal Management Plan, which outlines the basic direction of fiscal management. The Ministry of Economy and Finance then notifies each ministry of the budget formulation guidelines and fund management plan guidelines by the end of March. Ministries submit their budget requests, referencing these guidelines, to the Ministry of Economy and Finance by the end of May. The Ministry then prepares the budget bill and must submit it to the National Assembly by September 3.

Under current law, the government is required to report the budget formulation guidelines and fund management plan guidelines to the National Assembly, but there is no specified deadline. This has led to criticism that parliamentary oversight is effectively limited, as reports may be delayed according to the government's schedule. Although the direction of the fiscal management plan is usually set before June, the deadline for submission to the National Assembly is set at 120 days before the start of the fiscal year, so it is typically submitted in early September. In effect, the National Assembly receives the plan when the government's budget proposal is nearly finalized.

The proposed amendment seeks to address this by specifying that the budget formulation guidelines and fund management plan guidelines must be reported to the Special Committee on Budget and Accounts of the National Assembly by April 15 each year. In addition, the deadline for submitting the National Fiscal Management Plan to the National Assembly would be moved up to June 30 each year. This would allow the National Assembly to review the guidelines and allocation directions that form the framework of the budget bill.

The National Assembly’s budget review has been mired in controversy over hasty processing every year. Although the legal deadline for passing the budget bill is December 2, this deadline has been missed in most cases. For next year's budget, the ruling and opposition parties reached a last-minute agreement with just 20 minutes left before the deadline, but since the National Assembly Advancement Act was enacted in 2014, the legal deadline has only been met three times. In practice, budget review begins in November, after the National Assembly's audits and government questioning in September and October, and even then is often delayed by wrangling between the parties.

Assemblywoman Kim emphasized, "This amendment is a procedural improvement to institutionally reinforce the National Assembly's budget review authority," adding, "For the National Assembly to properly review the budget bill, there must be sufficient time to examine the basic direction of fiscal management and the structure of medium- and long-term resource allocation, even before the actual budget figures are presented."