The government is expected to have approximately 760 billion won available this year to support unforeseen disaster damages like the Jeju Air disaster at Muan International Airport. This is a result of the Democratic Party independently passing a 'reduction budget bill' in December last year, cutting over 1 trillion won from disaster response funds. While there are no immediate issues in responding to the recent disaster, concerns have been raised about insufficient fiscal capacity to prepare for disasters and calamities occurring throughout the year.
According to the Ministry of Strategy and Finance on the 1st, the ministry activated the Muan Accident Response and Support Task Force (TF) team on Dec. 29 last year and is reviewing national treasury support demand related to the Jeju Air disaster.
The TF team consists of Dong-il Kim, head of the budget office, and officials such as the economic budget deliberation officer, national land budget director, administrative budget director, pension healthcare budget director, and safety budget director. It supports the Central Disaster and Safety Countermeasures Headquarters (CDSCHQ) and assists Choi, the acting deputy minister headed by the CDSCHQ. They share information between ministries and carry out follow-up procedures, such as budget allocation for the Muan region.
The government announced plans to designate Muan County, Jeonnam, where the accident occurred, as a special disaster area and execute 1 billion won in special disaster management funds for handling wreckage within this month. The CDSCHQ is preparing a recovery plan that includes providing disaster relief funds and death benefit payments to victims, deferment of national and local government tax payments, and execution of disaster recovery funds.
It usually takes about two to three weeks to prepare the disaster recovery plan. Once the plan is established, the estimated recovery funds will be executed from the national treasury. The government covers 70% of the recovery costs, with the remaining 30% borne by the local governing body.
Government financial resources for this purpose include disaster response funds of the Ministry of Interior and Safety and contingency funds from the Ministry of Strategy and Finance. The government plans to prioritize executing recovery funds from the 360 billion won disaster response funds allocated to the Ministry of Interior and Safety this year. This budget is for covering the entire year, so it seems the government will use contingency funds as well without spending all of the disaster response funds.
This year's contingency funds were set at 2.4 trillion won, a 50% reduction compared to the government's original proposal. Of this, 'purposed contingency funds' for disasters and calamities amount to 1.6 trillion won, approximately 1 trillion won less than the original proposal. According to conditions set by the Democratic Party, the purposed contingency funds are prioritizing free education for high school and 5-year-olds, leaving only about 400 billion won available for disaster. Consequently, the government's fiscal capacity to respond to disasters this year, excluding local governments, is approximately 760 billion won.
The government is confident in its fiscal capacity to support the Jeju Air disaster. However, concerns within the government suggest that the budget might be seriously insufficient to address disasters and calamities that may occur throughout the year.
A government official explained, 'Since it is the beginning of the year, the contingency funds remain intact, so there should be sufficient support for this disaster. However, with the Democratic Party having halved the total contingency funds, inevitable disruptions will arise in managing the contingency over the long term.'
Another government official also noted, 'Contingency funds are prepared to address unforeseeable expenditures, but the opposition party halved it. Since there’s a possibility of wildfires or floods this year, fiscal capacity will clearly be inadequate to respond.'
The possibility of organizing a supplementary budget within this year to cover the insufficient fiscal capacity is analyzed to have increased. However, the government expressed a cautious stance on the possibility of a supplementary budget, stating, 'Currently, it is too early to discuss a supplementary budget.'