Seoul: Rival political parties in South Korea have reached a provisional agreement to maintain next year's budget at the government's original proposal, with negotiations continuing just one day before the National Assembly's legal budget deadline. Officials have confirmed that the ruling Democratic Party (DP) and the main opposition People Power Party (PPP) have been in conflict over key aspects of the proposed 728 trillion-won (US$498 billion) budget, including funding for local gift certificate programs, policy funds, and taxes related to education and the presidential office's special activities.
According to Yonhap News Agency, DP Deputy Floor Leader Moon Jin-seog reported that the parties have agreed to limit spending cuts to approximately 4 trillion won after an extensive meeting. Both parties acknowledged the necessity of increasing funding for essential items, including mandatory expenditures, with detailed discussions on these adjustments ongoing.
A significant point of contention remains the corporate tax rate. The DP is advocating for a reversal of tax cuts implemented under former President Yoon Suk Yeol, while the PPP opposes any tax increase, arguing it would burden businesses. The parties are also divided over the PPP's demand for a parliamentary investigation into the prosecution's decision not to appeal a lower court ruling regarding a real estate development project in Seongnam, Gyeonggi Province, involving allegations of substantial profits by private firms during President Lee Jae Myung's tenure as mayor.
DP leader Jung Chung-rae expressed commitment to passing the first budget under the Lee Jae Myung administration within the deadline. Meanwhile, the PPP has criticized what it calls "populist spending" by the DP, particularly the allocation of 1.15 trillion won for local gift certificate programs. Rep. Kim Do-eup of the PPP has voiced concerns about the proposed corporate tax increase, highlighting the challenges faced by businesses due to high exchange rates, inflation, and interest rates.
As the legal deadline for the budget's passage approaches on December 2, floor leaders from both parties, including DP's Rep. Kim Byung-kee and PPP's Rep. Song Eon-seog, have met at the National Assembly to reconcile their differences. Historically, political disagreements have led to missed deadlines for budget approval in the National Assembly.