Gov¡¯t, MDP disagree on budget proposal

The compilation work for the next year`s budget is off to a shaky start as the government and the ruling Millennium Democratic Party (MDP) cannot find a common ground. Some point that the tax burden is heavier and the estimated expenditures are ineffectively compiled.

The government and the ruling party held a conference on the morning of September 5 to confirm the budget proposal for the 2001 fiscal year. At the conference, the ruling party demanded a complete face-lift of the proposal reasoning that the 101 trillion budget prepared by the Ministry of Planning and Budget will wage more burden on the people and there are just too much ineffectiveness in the estimated expenditures.

MDP¡¯s policy chairman Lee Hae-Chan announced that the party will prepare a proposal that will lower or technically distribute the burden on the people, by thoroughly reviewing the budget proposal of the government, asserting that the budget increase by 6 trillion as proposed by the government is not right at this difficult time for the people. On the other hand, the government announced that the budget has been prepared 2 to 3% lower from the expected economic growth rate of 8 to 9% next year.

Experts asserted that the economic growth rate of 8 to 9% is too optimistic, considering the recent slowing down of the economy. They point that the heavy taxation at the down phase of the economy could jeopardize corporate activities. Moreover, the budget exceeding 100 trillion could trigger inflation and lead to moral hazard.

Lee Hoon dreamland@donga.com