2018 Budget

[Anchor Lead]

The Moon Jae-in administration has announced its first annual budget since President Moon took office. The 2018 budget will see an increase of about seven percent, or 28 trillion won, from this year's budget. The increase is aimed at creating jobs and expanding welfare benefits to the people.

[Pkg]

The Korean government has set the 2018 budget at 429 trillion won, or 7.1 percent more than this year. The government will finalize the budget at a cabinet meeting on Tuesday and submit it for approval to the National Assembly on Friday. By sector, the healthcare, welfare and labor budget has been increased from this year by 12.9 percent to reach 146.2 trillion won. It's the largest increase in terms of rate and amount yet. The education budget was expanded by 11.7 percent, while the national defense budget by 6.9 percent. The national defense budget recorded the highest rate of increase in nine years. Meanwhile, the social overhead capital budget has been cut by about 20 percent, the largest decrease yet. The budget allocated to the culture sector was cut by over 8 percent. By project, the job creation budget rose 12 percent from this year to reach 19.2 trillion won. The government has decided to raise the budget for creating jobs for young people by 21 percent. This includes funding for job-seekers who find employment at small and medium-sized firms and those who need to combine studying and working. The government decided to increase defense improvement expenditures by 10.5 percent, the largest increase in nine years. The total national defense budget will amount to 43.1 trillion won. The government has also announced that it will save 11.5 trillion won by removing unnecessary expenditures and invest more than 26 trillion won in raising the minimum wage and basic pension. The fiscal deficit of 2018 will go up by one trillion won, while the national debt is expected to increase by 39 trillion won, surpassing 700 trillion won for the first time in the country's history.

[Soundbite] Kim Dong-yeon(Deputy Prime Minister of Finance) : "We paid particular attention to maintaining the nation's fiscal soundness in the mid- to long term by improving the fiscal balance to GDP and the national debt by 0.1 percentage points each compared to this year despite expansionary fiscal policies."

The government plans to cut spending by 62.7 trillion won in the next five years and increase tax revenues by levying higher taxes on high-income earners and conglomerates.