Analysis of the First Revised Supplementary Budget of 2017
June 19, 2017
Budget Analysis Coordination Division
The government submitted The First Revised Supplementary Budget of 2017 to the National Assembly on June 7th. The purpose of this revision is to create jobs, improve working conditions, and provide the ordinary citizens greater economic security. The revised supplementary budget amounts to KRW 11.2 trillion. It assumes an estimated surplus tax revenues of KRW 8.8 trillion, an annual surplus budget of KRW 1.1 trillion, and KRW 1.3 trillion in surplus funds. The government plans to spend KRW 4.2 trillion of these funds on job creation, KRW 1.2 trillion on improving working conditions, KRW 2.3 trillion on providing the ordinary citizens greater economic security, and KRW 3.5 trillion on reinforcing local government finances for their efforts on suburban job creation.
The Analysis of the First Revised Supplementary Budget of 2017 analyzed the following contents regarding the government’s proposal.
First, Chapter 1 provides an overview of the revised supplementary budget, along with an analysis of whether its objectives of ‘creating jobs and improving conditions’ are in line with the requirements of supplementary budgeting prescribed under the National Finance Law. Furthermore, it suggests agenda items for discussion during the deliberation proceedings through area-specific analysis of the four main fiscal programs of the proposal. Finally, it analyzes the job creation program after categorization according to the OECD’s labour market policy categories.
Second, Chapter 2 analyses the reassessment of the tax revenue as well as the economic impact of the revised supplementary budget. The government’s estimation of the tax revenue surplus is KRW 8.8 trillion and accordingly utilized this entirely for the source of the supplementary budget, whereas NABO analysis revealed an estimated surplus of KRW 11.8 trillion, which is KRW 3 trillion higher than the government forecast. The impact of this supplementary budget on economic growth in 2017 is expected to be 0.108~0.118%, depending on the execution rate up to the 3rd quarter. Further efforts should be made to increase the execution rate.
Third, Part 3 offers in-depth analysis of individual programs organized under 13 committees. In addition to identifying the outstanding issues of previous programs, it provides an outline of the supplementary budget programs conducted by each committee in the Overview section. The report aims to more effectively support the deliberation process of the National Assembly by presenting all of the programs to be conducted by each committee together as well as the items that must be discussed during deliberation proceedings.