NABO Fiscal Trends and Issues (Summer Edition)
26 July, 2017
Social Budget Analysis Division
I. Key Fiscal Indicators
As of May, the progress rates of gross income and gross expenditure against the total budget of 2017 are 47.3% and 46.1%, respectively. Gaining on the gross income increase up to May 2017, the consolidated fiscal balance (KW11.3 trillion surplus) improved by KW 6.8 trillion year-on-year. However, the central government debt (KW630.7 trillion) also increased by KW38.8 trillion compared to the end of 2016, due to additional issuance of government bonds.
Ⅱ. Fiscal Legislation Trends
Among the budget plans approved up to the second quarter of 2017, the 30 cases attached with a supplementary budget plan call for an additional fiscal requirement of KW47.3 trillion over five years from 2018. The approved bills that require additional fiscal supplements include the National Health Insurance Act which extended the timeframe for funding health insurance through the national treasury and the National Health Promotion Fund; partial amendments to the National Health Promotion Act (approved 30 March 2017); and partial amendments to the Restriction of Special Taxation Act (approved 30 March 2017) which reinforced employment-related tax incentives to boost job creation.
Ⅲ. Major Fiscal Issues
Key fiscal policies introduced in the second quarter of 2017 include the National Assembly’s approval of the first supplementary budget plan for 2017 and the establishment of a dementia support center and the expansion of a dementia care hospital as part of efforts to introduce a national dementia management program. In addition, the lending cap for tourism businesses was increased to cover their operational costs, an objective was set to establish 30,000 smart factories to take the lead in the fourth industrial revolution, a youth allowance was newly introduced by six local governments, and a government-led spatial information business is being pursued to support the development of new innovative industries.
Ⅳ. Fiscal Trends Overseas
The evaluation results of EU member States’ observation of the “Stability Pact” were introduced, such as those from the UK, Germany, France, Sweden and Italy.