(2nd LD) Gov't urges lawmakers to pass 2010 budget by deadline

(ATTN: ADDS Lee's quotes in paras 5-6, more info in para 9-10)
SEOUL, Nov. 17 (Yonhap) -- The South Korean government called on lawmakers
Tuesday to endorse its 2010 budget by early next month as it needs to frontload
spending in a bid to continue efforts to kick-start the still struggling economy.

The National Assembly is required to pass the budget proposal by Dec. 2., which
calls for a 2.5 percent increase from this year's spending to bolster economic
growth and stabilize the livelihood of ordinary people.
"Next year is an important period for us to fully get over the continuing
economic crisis and brace for a new future," Finance Minister Yoon Jeung-hyun
said, reading from a joint statement during a conference also attended by heads
of four other ministries.
"We want our budget proposal to be normally deliberated as soon as possible and
endorsed by the legal deadline so that it can keep the economic recovery trend
alive," he said, asking for lawmakers to cooperate in passing the 291.8 trillion
won (US$253.2 billion) budget proposal.
President Lee Myung-bak joined the ministers in urging ruling and opposition
parties to quickly pass the budget.
"The reason we were able to quickly recover from the global economic crisis was
because the government was quick to implement its stimulus packages. At a time
when we are still not seeing any significant increase in private spending, it is
very important for the government to be able to make financial expenditures at
appropriate moments," Lee was quoted as saying at a Cabinet meeting by his
spokeswoman Kim Eun-hye.
The process of deliberation for the budget proposal has been in limbo as ruling
and opposition lawmakers are locked in a fight over controversial spending plans
by the government such as the reconstruction of the nation's four major rivers.
The controversial project calls for the government to spend 22.2 trillion won by
2012 to restore the Han, Nakdong, Geum and Yeongsan rivers in order to prevent
floods and cope with water shortages. Critics say the mega-scale construction
plan lacks detailed business plans and could erode government capacity in helping
low-income families and carrying out what they say are more urgent tasks in the
face of an economic downturn.
Among the issues of contention between ruling and opposition parties is a
government attempt to amend plans for a new administrative city in central
Chungcheong Province.
The Sejong City plan had been expected to relocate up to nine government
ministries to the new city, but the government and the ruling party reportedly
want to change the plan to instead relocate private companies.
The call for an early passage of the budget plan comes amid growing optimism that
the economy might be bottoming out and indeed may have already hit its lowest
point amid improving indicators.
South Korea has unveiled diverse economic stimulus measures by frontloading its
budget, reducing taxes and keeping its key interest rate at the lowest level,
efforts aimed at bolstering domestic demand and kick-starting the sluggish
economy.
According to the nation's central bank, gross domestic product grew 2.9 percent
in the third quarter from three months earlier, a marked turnaround from a 5.1
percent plunge in the final quarter of last year.
But the government has cautioned against hasty optimism, citing possible downside
risks such as a sluggish private sector and slumping employment markets, saying
that it will maintain its fiscal support to keep alive the budding signs of
recovery.
"The private sector still lacks the ability to survive on its own with the
jobless rate failing to recover to pre-crisis levels," Yoon said. "Just as was
done this year, we need to frontload our budget by assigning it before the fiscal
year starts to resolve such problems. To that end, our budget proposal should be
passed by the legal deadline."
South Korea's parliament has habitually failed to pass the government's annual
budget plans by the legal deadline. Last year, the 2009 budget plan was endorsed
on Dec. 13.
Still, the government's joint press conference pressing for swift passage of the
budget did mark an unusual move. The meeting was attended by Finance Minister
Yoon along with heads of four other ministries including the Ministry of
Knowledge Economy, the Ministry of Land, Transport and Maritime Affairs and the
Ministry of Labor.
"The global economy is about to emerge from an unprecedented crisis but if we
fail to keep the momentum alive, it could result in the livelihood of low and
middle-income earners being left more vulnerable to an economic downturn," Yoon
said during the press conference. "(Against this backdrop), fiscal frontloading
is important. We need to frontload our budget spending next year as well to help
economically underprivileged people."
kokobj@yna.co.kr
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