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SEOUL, April 3 (Yonhap) -- Despite agreement on the need for a supplementary budget, the government and main political parties remain divided as to how to spend it and how to secure the funds, officials said Wednesday.
The government expects a revenue shortfall of about 12 trillion won (US$10.7 billion) this year amid a slowdown in the country's economic growth.
While the government hopes to fill that deficit entirely with the supplementary budget, the ruling Saenuri Party has proposed a smaller extra budget of between 5 and 10 trillion won to be channeled into creating jobs and supporting small- and medium-sized businesses.
That way, the economy would receive a greater boost than if the government simply balanced its balance sheet, according to party officials.
The size of the total supplementary budget is expected to range between 15 and 20 trillion won.
"Although it's true that the previous administration's estimated tax revenues for this year were exaggerated, the (current government's) estimate of a 12 trillion won shortfall is also excessive," said a key party official, asking that he not be identified.
The disagreement is seen to reflect the different objectives of the government and the ruling party. The government, which was inaugurated in late February, may be aiming to shed the baggage of the previous administration and start anew, while the Saenuri Party may be more focused on producing tangible results ahead of this month's by-elections and other elections scheduled for October and next year.
Senior officials from the party, government and the presidential office met late Monday to discuss the details of the planned extra budget but did not reach any decision, according to another party official.
Questions also remain as to how the funds should be secured.
While the government and the ruling party have proposed issuing government bonds, the main opposition Democratic United Party has offered a dual approach of both bonds and higher taxes.
The opposition has especially called for increasing taxes on the rich, citing concerns that a growing national debt could weaken the country's long-term fiscal health.
South Korea's economy is showing signs of losing its momentum in the face of lingering uncertainty at home and abroad.
Last week, the government slashed its growth outlook for this year to 2.3 percent from the 3 percent it predicted in December.
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