Finance minister refutes DP’s demand to sharply cut 2023 budget

Finance Minister Choo Kyung-ho on Friday refuted the main opposition Democratic Party’s (DP) call to cut the 2023 budget by 7.7 trillion won (US$5.9 billion), pointing out its demand does not consider discretionary expenditures.

Last week, the National Assembly missed the legal deadline to pass the first annual budget plan drawn up by the Yoon Suk-yeol administration, which came to power in May, leaving rival parties until Friday to handle the proposal within the National Assembly’s regular session.

“When cutting the budget, the parliament should consider both the previous reduction and the increase in next year’s total expenditures,” Choo said, suggesting the cut should be adjusted at around 1.3 trillion won.

The ruling People Power Party (PPP) and the DP are have been at odds over the scope of scaling down the budget, currently estimated at 639 trillion won. The ruling party claims the government can cut the amount by 2.6 trillion won at most.

In contrast, the DP claims the budget should be reduced by at least 5.1 trillion won, or up to 7.7 trillion won.

The finance minister, however, said the main opposition’s demand does not consider changes in discretionary expenditures.

For example, the 2023 budget plan already has reduced discretionary expenditures by 7 trillion won, whereas the amount rose by 20 trillion over the past five years under the previous administration, Choo said.

The PPP, meanwhile, also has pushed for gradually cutting the maximum corporate tax rate to 22 percent to garner more domestic investment. On the other hand, the DP demands to keep the current rate of 25 percent, claiming the PPP’s proposal only benefits conglomerates.

“As (the parties) have not yet narrowed down differences on issues such as corporate tax, their talks are showing no further progress,” Choo told reporters in a separate meeting earlier in the day. “It is up to the two parties to make a final decision.”