Go to Contents Go to Navigation

(2nd LD) Main opposition party decides to oppose budget deal

All Headlines 14:46 December 05, 2017

(ATTN: ADDS number of parliamentary seats)

SEOUL, Dec. 5 (Yonhap) -- The main opposition Liberty Korea Party decided Tuesday to oppose a budget deal reached by the ruling and opposition parties a day earlier, throwing into doubt the prospect of next year's government budget passing through the National Assembly.

On Monday, the floor leaders of the LKP, the ruling Democratic Party and the minor opposition People's Party announced the agreement after finding a compromise on key sticking points, such as a proposal to create thousands of new government jobs.

The agreement was seen as a breakthrough in deadlocked negotiations, even though the deal clearly stated that the LKP's floor leader expressed reservations about some contentious points, including the planned creation of new public service jobs.

That position was not considered a major problem, as the three parties agreed to hold a vote the following day.

However, the situation changed abruptly Tuesday as LKP lawmakers refused to endorse the agreement, taking issue mainly with the plan to create thousands of public service jobs and the planned hikes in the corporate and income tax rates for big businesses and top earners.

During a general meeting of all party lawmakers, LKP members criticized the floor leader, Rep. Chung Woo-taik, for agreeing to the deal, and some even raised calls to boycott the National Assembly session. After the meeting, the party decided to oppose the deal altogether.

"We've concluded that we cannot support the agreement pushed for by the government and the ruling party," Chung told reporters after the meeting. "We've decided we cannot accept the entire agreement because of the issues of increasing the number of public servants and the corporate tax hike."

Party officials said they will determine their next course of action later.

The LKP's decision threw into doubt the widely expected passage of the budget, though the bill can still pass if the minor opposition People's Party, which has 40 seats, joins forces with the ruling Democratic Party to vote for it. Their combined strength in the 299-member legislature is 161 seats.

(2nd LD) Main opposition party decides to oppose budget deal - 1

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.
(END)

HOME TOP
Send Feedback
How can we improve?
Thanks for your feedback!