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🇰🇷 South Korea /Economy & Trade

Osan City faces budget shortfall, enters austerity drive

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • Osan City is implementing stringent austerity measures due to a budget shortfall of approximately 6 billion won needed for essential projects and ongoing initiatives.
  • The city faces a financial crisis stemming from large-scale infrastructure projects and previous commitments made during the previous administration, including land purchases and preparations for a provincial sports event.
  • To address the deficit, Osan City will conduct a "reduction budget" by re-evaluating all projects, cutting unnecessary expenses, and reallocating funds to priority areas like citizen welfare, safety, and key campaign pledges.

Osan City is embarking on a severe austerity drive, prioritizing fiscal discipline as it grapples with a significant budget deficit that threatens even its core campaign promises.

The city requires an estimated 6 billion won to fund essential projects and maintain ongoing initiatives, prompting a "reduction budget" (supplementary budget with cuts) to navigate the financial constraints. This move signals a departure from the previous administration's spending patterns, which saw a rapid increase in expenditures.

Financial strain has intensified due to substantial investments made in the previous term, including the 51.6 billion won allocated for the purchase of the Seyeong-1 terminal site and an additional 15 billion won needed for the upcoming Gyeonggi Provincial Sports Festival. Compounding these issues are the rising local government contributions required for national and provincial co-funded projects and the continuous growth in welfare expenses, leaving little room for new policy initiatives.

To overcome this crisis, Osan City plans a thorough review of all departmental projects in the upcoming third supplementary budget. Projects that are lagging or no longer feasible due to changing circumstances will face full or partial budget cuts. The city will also implement four key fiscal reform measures, including sunsetting ineffective policies, streamlining carried-over projects, strengthening performance evaluations for local subsidies, and eliminating superficial budget allocations.

Mayor Cho Yong-ho stressed the importance of prioritizing investments rather than simply increasing the budget. The city aims to reinvest any saved funds into areas such as economic recovery, citizen safety, and critical local issues. Simultaneously, Osan City will actively seek external funding sources, including special grants and competitive projects from the central government and the Gyeonggi provincial government.

It is a time when prioritizing where to invest is more important than how much budget to allocate.

— Cho Yong-hoDuring a briefing on the planning and finance department's work, instructing officials to carefully review project priorities.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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