Last year, the amount classified as 'de facto unused' of the budget that was not executed, excluding internal transactions, was estimated to exceed 9 trillion won. This figure is comparable to the unprecedented 'tax revenue shortfall' recorded two years ago, marking the second-largest scale of unspent budget in history.
The Ministry of Strategy and Finance announced the results of the '2024 fiscal year total revenue and total expenditure closure' on the 10th. This process finalized the government's revenue and expenditure for the previous year, reflecting the performance of the general accounts and special accounts excluding funds. The government will prepare a financial statement based on this performance and submit it to the National Assembly by the end of May after an audit by the Board of Audit and Inspection.
◇ 9.3 trillion won left unspent... the second-largest since 2023
The total expenditure of the government last year was 529.5 trillion won. This was 24.5 trillion won short of the originally planned budget (554 trillion won). Excluding the amount that can be carried over to the next year according to legally defined purposes (4.5 trillion won), the 'settlement of account excess' was tallied at 20.1 trillion won.
The 'de facto unused amount,' excluding amounts that are automatically deducted due to fluctuations in national tax revenues such as grant-in-aid (non-earmarked tax) and the government's internal transaction amounts between accounts and funds, was 9.3 trillion won. This is the second-largest amount since the digital budget accounting system (dBrain) was introduced in 2007, following the de facto unused amount recorded during the 2023 fiscal year (10.8 trillion won).
This is interpreted as a continuation of the significant tax revenue shortfall that occurred last year, following a similar situation two years prior. However, the government noted that it made efforts to minimize the unused amounts that could adversely affect the economy. A Ministry of Strategy and Finance official said, 'We significantly minimized the project expense waste to 6.8 trillion won, which is the typical cost of unused funds' and 'In addition, the lower occurrence of disasters and emergencies compared to previous years resulted in reserves not being executed, thereby increasing the size of the de facto unused funds.'
◇ Despite recording a 30.8 trillion won tax revenue shortfall, it was filled with non-tax income
The total revenue, referring to the money earned by the government, recorded 535.9 trillion won last year. This was a 14.1 trillion won decrease compared to the budget (550 trillion won). The national tax revenue collected through various taxes accounted for 336.5 trillion won, resulting in a 'shortfall' of 30.8 trillion won compared to the budget.
This figure is larger than the shortfall recalculated in September of last year (29.6 trillion won). A Ministry of Strategy and Finance official noted, 'The semiconductor market is expected to recover after the third quarter, and the value-added taxes refunds for corporations that made large-scale investments increased, alongside the impact of sluggish domestic demand.'
The remaining non-tax income recorded 199.4 trillion won, an increase of 16.7 trillion won compared to the budget. This reflects an active effort to fill the gap created in national tax revenue with non-tax income.
The surplus after deducting total expenditure from total revenue and excluding the carryover for the next year was calculated at 2 trillion won. Of this, the surplus from the general account was 400 billion won, while the surplus from the special accounts was 1.6 trillion won. The general account surplus can be utilized in the order of settlement of grant-in-aid (non-earmarked tax), contributions to the Public Fund Repayment Fund, and utilization for revenue transfers or supplementary budget resources in accordance with the National Finance Act. The surplus from the general account was only about 400 billion won two years ago, marking the smallest scale in history, and it remained small this year as well. The government curtailed spending in line with lower earnings, reducing the capacity to utilize remaining funds in the following year.
Nevertheless, the government assessed that it performed well. Kim Yun-sang, the second vice minister of the Ministry of Strategy and Finance, stated, 'Even amidst two consecutive years of tax revenue shortfalls, we maximized the use of available fund resources to support fiscal projects aimed at stabilizing livelihoods and invigorating the economy without disruption,' adding that 'as a result, the government's contribution to the gross domestic product (GDP) growth rate recorded an annual basis of 0.4 percentage points.'