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National Assembly to vote on next year's budget

All News 11:09 December 05, 2017

SEOUL, Dec. 5 (Yonhap) -- The National Assembly is set to hold a vote on the government's budget for next year on Tuesday after the ruling and opposition parties reached a compromise deal a day earlier over a series of key contentious issues.

The vote had originally been scheduled for Tuesday morning, but has been postponed until the afternoon session, as it took more time than expected for the parties to fine-tune the details of the budget of 429 trillion won (US$395 billion).

National Assembly to vote on next year's budget - 1

The vote takes place a day after the three largest parties -- the ruling Democratic Party, the main opposition Liberty Korea Party (LKP) and minor opposition People's Party -- found a compromise by trading concessions on major points of contention.

They arrived at this deal two days after the legal deadline for the budget's passage.

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 of a 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 thresholds at which businesses are subject to the highest corporate tax rate. The government originally wanted to increase it from the current 22 percent to 25 percent on those companies with taxable profit of 200 billion won or over. But the parties have now agreed that it should be levied on those with 300 billion won or higher, while agreeing to a hike of the rate to 25 percent.

The parties also 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 rise comes in the context of the Moon government's decision 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 proposed rise in basic pension to 250,000 won and provision of children's allowance of 100,000 won per household will come into effect starting next year in line with the government's plan, with the time of implementation and the scope of the beneficiaries to be slightly adjusted in the opposition parties' favor.

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