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(LEAD) Rival parties reach tentative agreement over next year's budget

All News 18:24 December 04, 2017

(ATTN: RECASTS headline, lead; UPDATES with more info throughout)

SEOUL, Dec. 4 (Yonhap) -- The ruling and opposition parties reached a tentative deal Monday in negotiations over the government's budget for next year, although some of the key sticking points, including creating more public service jobs, are pending the main opposition party's consent after it deferred its decision for another day.

The floor leaders of the ruling Democratic Party, the main opposition Liberty Korea Party (LKP) and minor opposition People's Party announced the agreement, two days after the parties missed the legal deadline for budget's passage over key contentious issues in the 429 trillion won (US$395 billion) budget.

Major bones of contention in the original budget bill were a proposal to use 534.9 billion won to support Moon's push to create 174,000 new public service jobs by 2022 and the 3 trillion won "job stability" plan to bankroll next year's minimum wage increase.

Opposition parties sought to reduce the number of public sector jobs to be created, arguing that such a sharp increase would put too much burden on future generations. They also demanded the job stability plan be applied for only one year.

Under Monday's deal, the parties agreed on a provisional deal to set the number of new public service jobs at 9,475, down from the 12,221 initially proposed by the ruling party and the Moon Jae-in administration as part of the government's key job creation plan.

They also temporarily agreed to raise the corporate tax rate for businesses with taxable profit of more than 300 billion won to 25 percent.

But the main opposition made it clear that it does not agree on the two provisions.

"We stated that we put off our decision as we do not agree on the increases of the corporate tax and number of public officials," Chung Woo-taik, floor leader of the LKP told a press briefing.

The LKP said it will hold a meeting in the evening to finalize its decision on the two proposals.

They all agreed to set the state subsidy for smaller businesses against the burden of the planned minimum wage hike at 2.97 trillion won for next year, with the amount for the 2019 subsidy not to exceed the previous year's expenditure.

The subsidy for the minimum wage hike comes as the Moon government decided to provide financial support to make up for the costs of a sharp rise of the legal minimum hourly rate, which is increasing 16.4 percent to 7,485 won.

The parliament will hold a plenary session Tuesday to put the revised budget bill to a vote.

The floor leaders of the rival parties -- Chung Woo-taik (L) of the main opposition Liberty Party Korea, Woo Won-shik (2nd from L) of the ruling Democratic Party and Kim Dong-cheol (2nd from R) of the liberal People's Party -- and Finance Minister Kim Dong-yeon put their hands together at an announcement of a tentative agreement on the 2018 budget spending plan on Dec. 4, 2017. (Yonhap)


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