A new report shows that the central government needs to pay closer attention to the mounting financial burden caused by its surge in welfare spending.
According to a 2012 fiscal analysis report by the National Assembly Budget Office, local provincial governments are expected to take on an additional 13.7 trillion won in spending from this year til 2017.
The increased spending is mainly due to the introduction of major welfare projects including the basic old age pension program and expanded childcare support.
The budget office added that if government subsidy rates fall below 10 percent for Seoul or 40 percent for local governments, then the central government will need to raise reasonable financial support or face a shortage of funds.■
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