Finance minister urges quick passage of extra budget bill

By Yonhap
  • Published : Apr 16, 2018 - 10:51
  • Updated : Apr 16, 2018 - 11:51

South Korea's chief economic policymaker on Monday urged the National Assembly to quickly approve a proposed extra budget bill that is urgently needed to tackle the country's chronic youth unemployment problem.

Early this month, the government unveiled a set of measures, including bolder financial and tax incentives and the use of a 3.9 trillion-won ($3.64 billion) extra budget, to respond to the high jobless rate among young people. The government submitted the supplementary budget proposal to the National Assembly on April 5.

The ruling Democratic Party holds 41 percent of the 293 parliamentary seats and needs the support of the opposition parties to secure the extra budget.

Finance Minister Kim Dong-yeon speaks during a economy ministers meeting in Seoul on April 16, 2018. (Yonhap)

"The country's youth unemployment has worsened and the overall employment conditions are also not good," Finance Minister Kim Dong-yeon said during a economy ministers meeting. "The quick passage would be helpful in addressing such challenges."

The minister also said the supplementary budget bill is aimed at helping workers affected by recent corporate restructuring.

The measures center on extending direct financial and tax incentives to young jobseekers. The government also proposed broader support for startups launched by young people, with part of the financing to come from a supplementary budget.

Despite various measures taken in the past, youth unemployment has consistently worsened, due mainly to structural changes in the country's industrial, educational and labor markets. This has led many young people to put off marriage, in turn worsening the very low birthrate.

The government hopes that with the pledged support, the nation's youth unemployment will be reduced to below 8 percent by 2021 and up to 220,000 jobs will be newly added in the one-year period.

As of the end of December, the unemployment rate for people between 15 and 29 years of age came to 9.2 percent, nearly three times higher than the overall national jobless rate of 3.3 percent.

The move follows President Moon Jae-in's call for an all-out effort to create new quality jobs for young people and his warning that the high youth jobless rate is a national disaster.

Creating quality jobs, especially for the young, was one of Moon's key election pledges. The president has promised to add 810,000 new jobs in the public sector during his single five-year term, which ends in May 2022.

The proposed extra budget is the second of its kind under the Moon Jae-in administration. Last year, the Moon administration formed an 11 trillion-won supplementary budget that aims to create more quality jobs.

Meanwhile, the finance minister said the Seoul government will decide soon on whether and how to reveal the records of its past currency market intervention.

Seoul's finance ministry said earlier that South Korea is considering disclosing details of its interventions in the foreign exchange market in a move to boost transparency and clear itself of suspicion of influencing rates.

South Korea's financial authorities have persistently claimed they do not interfere in the foreign exchange market but only engage in "smoothing operations" against extreme one-sided movements.

Last week, the minister said he will discuss currency market-related issues, such as how to reveal records of its market interventions, with the International Monetary Fund this week.

In its latest report, the US did not designate South Korea as a currency manipulator, but kept it on its list of countries it is monitoring closely.

Washington has vowed to aggressively keep tabs on and combat unfair currency practices, saying the US cannot and will not bear the burden of an international trading system that, it claims, unfairly disadvantages American exports and gives an edge to its trading partners.(Yonhap)