Seoul, Dec 1 Rival political parties reached a provisional agreement Monday to keep next year's budget at the government's original proposal, as the two sides continued last-minute negotiations just one day before the National Assembly's legal deadline for passing the bill, officials said.
The ruling Democratic Party (DP) and the main opposition People Power Party (PPP) have been at loggerheads over key items in next year's 728 trillion-won budget (USD498 billion) proposal, including funding for local gift certificate programs. Other contentious items include policy funds, the presidential office's special activity expenses, and education and other taxes, Yonhap News Agency reported.
After holding an hours-long meeting, DP Deputy Floor Leader Moon Jin-seog told reporters that negotiations on spending cuts have been settled, with both sides agreeing to cap the total amount of cuts at around 4 trillion won.
He also noted that the parties recognised the need to increase funding for essential items, including mandatory expenditures, and that talks on detailed adjustments will continue.
"The two sides appear to be getting closer to an agreement," another DP official told Yonhap News Agency.
A major sticking point was the corporate tax rate. The DP is pushing to reverse the cuts introduced under the former Yoon Suk Yeol government, while the PPP has expressed opposition to raising the taxes, citing the burden it would place on businesses.
The two parties have also clashed over the PPP's push for a parliamentary probe into the prosecution's decision not to appeal a lower court ruling in a high-profile real estate development project in Seongnam, Gyeonggi Province.
The case centers on allegations that little-known private asset management firms, including Hwacheon Daeyu, were allowed to reap massive profits from the 2015 Daejang-dong development project while President Lee Jae Myung was mayor.
"We will ensure that the first budget of the Lee Jae Myung administration is passed within the deadline," DP leader Jung Chung-rae said during the party's supreme council meeting earlier in the day.
Meanwhile, the PPP has urged the DP to scale back what it described as "populist spending," demanding cuts to the 1.15 trillion won earmarked for local gift certificate programs.
At the PPP's supreme council meeting, Representative Kim Do-eup criticized the DP's push for a corporate tax hike, saying it would affect all businesses, including small and medium-sized enterprises, at a time when they are already "suffocating" under the triple whammy of high exchange rates, high inflation and high interest rates.
Floor leaders from both parties -- DP floor leader Rep. Kim
Although the legal deadline for the budget plan's passage is Dec. 2, the National Assembly has frequently failed to meet the deadline in the past due to political wrangling between rival parties.
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