The Ministry of Culture, Sports and Tourism asked the Ministry of Planning and Budget to increase next year's budget for "national cultural activity support," which subsidizes culture, arts, tourism, and sports expense for vulnerable groups such as basic livelihood recipients, by 50% from this year. Each year, when ministries submit their budget requests to the ministry, the Ministry of Planning and Budget reviews them and drafts the budget bill.
However, the project received a recommendation for a cut in the Ministry of Planning and Budget's "integrated fiscal project performance evaluation," conducted for the first time this year. The evaluations that ministries had conducted on their own were handed over to outside experts, and the project was assessed as underperforming because cases of fraudulent benefits were found over the past three years. If a project is recommended for a cut, the ministry must submit next year's budget to the Ministry of Planning and Budget with a 15% reduction, but the Ministry of Culture, Sports and Tourism (MCST) instead asked for an increase.
The Ministry of Culture, Sports and Tourism (MCST) said it "has integrated and streamlined the detailed programs cited for fraudulent benefits and is managing them stably." It also said the project needs to be expanded "to fulfill the national policy task of expanding the public's everyday enjoyment of culture."
It turned out that the scale of government ministry projects that said they could not comply even after receiving recommendations for cuts in fiscal project evaluations amounts to 1.6 trillion won. The Ministry of Planning and Budget expected the evaluation to yield an expenditure restructuring effect of 7.7 trillion won. But with some ministries citing reasons such as "national policy tasks" to not only avoid cuts but even request increases, concerns are growing that the expenditure restructuring effect will be halved.
◇ Of 19 ministries, 17 say "we can't cut"... some even say "it's a national policy task, so increase it"
According to the Ministry of Planning and Budget, a total of 858 projects were recommended for cuts in this year's fiscal project evaluation, with a budget size of about 51 trillion won. An analysis by ChosunBiz of the government's Open Fiscal Information Disclosure System found that 17 of the 19 central government ministries, excluding the Ministry of Foreign Affairs and the Ministry of Justice, submitted statements explaining why the recommended cuts were not reflected. If a ministry cannot make cuts contrary to the ministry's recommendation, it must state the reason.
Statements of reasons for not reflecting cuts were submitted for a total of 191 projects. By ministry, the Ministry of Culture, Sports and Tourism (MCST) had the most with 34, followed by the Ministry of Land, Infrastructure and Transport and the Ministry of Health and Welfare with 25 each. Next came the Ministry of Oceans and Fisheries (MOF) with 22 and the Ministry of Climate, Energy and Environment with 21.
The largest amount of unreflected cuts was at the Ministry of Land, Infrastructure and Transport (MOLIT), at 581.4 billion won. This is the sum of amounts that were not cut despite being told to reduce next year's budget by 15%. Although MOLIT ranks fourth among central ministries in budget size, it ranked first in the amount of project budgets recommended for cuts in the fiscal project evaluation, at about 20 trillion won. The MOLIT road maintenance project (865.9 billion won) was supposed to be reduced by 129.9 billion won, but it requested 929.4 billion won for next year's budget. It asked for an increase of 63.5 billion won.
Next were ▲ the Ministry of Climate, Energy and Environment (214.1 billion won) ▲ the Ministry of Culture, Sports and Tourism (MCST) (194.5 billion won) ▲ the Ministry of Health and Welfare (182.1 billion won) ▲ the Ministry of National Defense (110.5 billion won).
◇ Ministry of Planning and Budget warned of "basic expense cuts"... "fulfilling national policy tasks comes first"
The main reasons ministries cited for being unable to cut were the high share of rigid expenditures such as labor costs and statutory expenses. They also cited reasons such as the projects being continuing projects that have already broken ground and cannot be halted, and that cuts are difficult during the process of reorganizing and integrating sub-projects.
One analysis is that one reason ministries are not implementing the recommendations from the fiscal project evaluations is the limited effectiveness of sanctions. The Ministry of Planning and Budget said it would require ministries to disclose statements explaining noncompliance with cuts and impose penalties when allocating basic expense budgets. An official at a government ministry said, "In a situation where ministries compete on national policy task implementation rates, the possibility of basic expense cuts does not serve as a strong penalty."