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| President Yoon Suk Yeol, third from left, speaks during the inaugural meeting of the Presidential Committee on Ageing Society and Population Policy at the guesthouse of the former presidential office, Cheong Wa Dae, in Seoul, Tuesday. Yonhap |
President underlines government's responsibility as demographic crisis looms
By Yi Whan-woo
The government announced on Tuesday that it is prioritizing tackling the low birthrate in an "engaging and thorough manner" in drawing up next year's budget amid snowballing concerns over a looming demographic crisis. The budget will also be spent on labor, education and pension reforms.
In a Cabinet meeting in Seoul presided over by President Yoon Suk Yeol, the Ministry of Economy and Finance said it plans to employ a "choose and concentrate" strategy in allocating the 39.8 trillion won ($30.6 billion) budget to encourage more births in 2024.
The 39.8 trillion won is a part of a broader budget worth 79.3 trillion won aimed at countering problems associated with the demographic cliff, such as the declining birthrate, fast-aging population, a shrinking workforce and an economic slowdown.
The announcement comes as the government has been spending more than 280 trillion won since 2006 when it acknowledged the serious nature of the low birthrate and yet failed to prevent it from worsening.
According to Statistics Korea, Korea's fertility rate fell to a new low of 0.78 in 2022 and continued to remain at the bottom out of 38 OECD member countries since 2013.
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| President Yoon Suk Yeol speaks as Prime Minister Han Duck-soo, left, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho, third from left, and other Cabinet members listen during a meeting at the presidential office in Yongsan District in central Seoul, Tuesday. Yonhap |
Under the circumstances, the finance ministry emphasized that the 39.8 trillion won will be spent to resolve the causes of the low birthrate.
It specifically noted that state-run support will be offered in every stage of a child's development including those of newborns, infants, toddlers and preschoolers to lessen the cost of child care for parents.
It also said "tailor-made services" will be offered for parents in terms of housing, jobs, career breaks, and other assistance needed to raise a child.
Later on Tuesday, Yoon hosted the inaugural meeting of the Presidential Committee on Ageing Society and Population Policy where he underlined that the government "should take full responsibility and ensure that people learn about the joy of having babies and raising children."
"We should think about why our birth-related policy failed, even though we spent a tremendous amount of money on it over the past 15 years," he said. "We should check whether the current measures on child care are working properly, and if not, take bold measures to overcome obstacles."
Meanwhile, the government hinted that it will continue to embrace its belt-tightening policy in drawing up next year's budget, to curb snowballing national debt that is forecast to increase to more than 50 percent of gross domestic product (GDP).
The finance ministry estimated the overall 2024 budget to be 669.4 trillion won, up 4.8 percent from this year.
The year-on-year spending growth rate will be slower than 5.1 percent from 2022 to 2023.
On average, the budget is planned to increase yearly at 4.6 percent on average from 2022 to 2026, compared to 8.7 percent from 2018 to 2022 under the expansionary fiscal policy embraced by the previous Moon Jae-in government.
In a separate briefing by the ministry at Government Complex Sejong, Second Vice Finance Minister Choi Sang-dae said 2024 will be the third year of Yoon's single, five-year presidency and that the budget for that year will be critical "to start materializing outcomes of state affairs."
He noted the 2024 budget will focus on carrying out three reforms in labor, education and pension as addressed by the president, as well as boosting exports, nurturing startups, fostering strategic technologies, bolstering digital innovation and enhancing competitiveness in media and tourism sectors.
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