Expanded welfare policies faltering due to serious budget constraints
By Kim Rahn
Mayors and governors across the country urged the central government to expand its childcare subsidies, Thursday, threatening that otherwise they won’t be able to carry out the free programs.
Heads of the nation’s 16 cities and provinces issued a joint statement demanding the government promptly come up with measures to solve their budget shortfalls for the expanded welfare policy.
Their call comes after the National Assembly passed a bill to provide free nursery services for infants up to the age of two. The government said earlier this year that municipalities and provinces should foot half of the expenses.
“Local authorities can’t prepare the money because of a drop in tax revenue and an increase in welfare expenses. But the Assembly and the government forced us to share the cost without our agreement or taking our financial situation into consideration,” said South Jeolla Province Governor Park Joon-yung, president of the Governors’ Association of Korea (GAK), at a press conference in Seoul.
While the government allocated 369.7 billion won ($325 million) for the policy this year, the municipalities are required to set aside 327.9 billion won as their share.
Park said it was impossible for them to raise the money because they had set their 2012 budgets before the policy was announced.
He said they will actually need 720 billion won because parents who didn’t plan to send their children to nurseries will now move to send them because they can get subsidies.
“We’ve asked the government numerous times to implement the free childcare program with state money only. But it hasn’t presented any measure to lessen our financial burden. If no measure comes, our money for the program will dry up around June,” he said.
The governors claimed the government should have prior discussions with municipalities about projects that will require local authority funding.
They said they won’t cooperate with the government if it makes them share financial and administrative responsibility without prior discussion.
However, Park said they hadn’t decided yet whether to boycott the program if the government fails to meet their demands. “Even if we don’t boycott it, we won’t be able to pay our share anyway because the money will run out,” he said.
In response to their calls, the government has set up a task force under the Prime Minister’s Office to come up with a solution.
It also said it may give about 4 trillion won from tax revenue to the municipalities. But Incheon Mayor Song Young-gil, auditor of GAK, said the government hasn’t told them anything about it.
“The Assembly adopted the program without any measures because politicians are trying to woo voters ahead of the elections. Even the ruling Saenuri Party didn’t properly discuss the issue with the welfare ministry,” Song said.
He said the program also has problem in fairness, as subsidies are offered only to children attending nurseries, not to children being taken care of at home, which will result in a boom in nursery admission applications. Children aged three and four are excluded from the program as well.
“The Assembly’s hasty policy caused the confusion. When planning welfare-related policy, politicians should thoroughly consider how to pay for it,” Song said.