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By Ahn Seon-hee, Staff Writer and Hwangbo Yon

The 2011 budget railroaded through the National Assembly by the ruling Grand National Party on Wednesday did not reflect the “expanded child care allowance” pledged by the party during the June 2 local elections. Also encountering setbacks due to the rapid chilling of the political climate following the railroading was legislation for shared growth by small and medium enterprises (SMEs) and large corporations. While the “pro-working class” and “shared growth” elements were absent from the budget, the National Assembly budget review process saw a large increase in the budget to address local constituency appeals.

The total scale of expenditures for 2011 as passed by the National Assembly, including the budget and funding, amounted to 309.01 trillion Won ($271 billion), a 495.1 billion won reduction from the plan initially submitted by the Lee Myung-bak administration. Of the twelve total areas in the budget, large cuts were seen in only two, namely general public administration (900 billion Won) and education (100 billion Won).

However, the GNP did not allocate any of the budget for the childcare allowance increase pledged by its candidates during the local elections. The Lee Myung-bak government’s initial budget plan had 200 thousand Won provided for every child under two years of age, limited to the “near-poverty” class, which represents only 6.5 percent of all households.

But Ko Heung-kil, chairman of the GNP’s Policy Committee, announced in an open press conference in September that the additional budget requirement would be 329 billion Won.

“We are planning to discuss matters with the administration in order to follow through on the plan to expand the child care allowance in the next year’s budget to include working class and middle class families outside the top 30 percent,” Ko said at the time.

Also missing from the final budget was 33.9 billion Won in increased state support for compulsory infant inoculations, agreed upon at a party-government meeting in September as a measure to address the low birth rate.

While the GNP did not keep to its welfare pledge, it did manage to arrange a budget to address appeals by local constituencies. The budget was increased by about 100 billion Won each in all five areas of social overhead capital (SOC) investment, public health, welfare and labor, culture, sports, and tourism, environment, and national defense.

“Frankly speaking, most of the increases in culture, environment, and SOC such as highway construction was a reflection of appeals from local constituencies,” said a Ministry of Strategy and Finance official said.

Indeed, many of the increases in the environment and culture areas are for local projects such as township-level sewage treatment site expansion, sewer servicing for farming and fishing villages, model public design cities, and the construction of a second municipal art museum in Busan.

Also encountering setbacks was the implementation of government measures for shared growth between SMEs and large corporations. The National Assembly’s national policy committee was originally scheduled to hold a legislative review subcommittee meeting Thursday morning to review legislation such as an amendment of the Fair Subcontract Transactions Act. However, the meeting failed to take place when all of the DP members of the committee refused to attend. As of now, it is also unclear when the next subcommittee meeting will be convened.

The amendment of the Fair Subcontract Transactions Act was the heart of the Lee administration’s shared growth measures as announced on Sept. 29. It would give SME cooperative unions the right to request mediation and discussions on delivery unit costs and broaden the scope of application for the law to include secondary and tertiary subcontractors.

To buy time, the Lee administration took steps to hasten the amendment procedure, for example by submitting the amendment to the national policy committee on Oct. 29 in the form of lawmaker-introduced legislation. The aim was to honor the pledge to complete the amendment by the end of the year and have shared growth measures in effect as of 2011.

“We need to go through legislative procedures as soon as possible, since SMEs are also calling for the shared growth amendment to be pursued quickly,” said a Fair Trade Commission official.

Please direct questions or comments to [englishhani@hani.co.kr]