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Rival parties reach agreement on budget bill

All News 18:04 November 28, 2014

SEOUL, Nov. 28 (Yonhap) -- Rival political parties reached an agreement Friday on the government's budget for next year, ending the opposition party's boycott of the parliament and raising hopes of passing the budget bill by its deadline.

The budget bill has been a source of bipartisan dispute in recent weeks as the ruling Saenuri Party and the main opposition New Politics Alliance for Democracy have clashed over various issues, including a free care program for young children and corporate tax rates.

As negotiations over the child care program stalled, the opposition party declared a boycott of all parliamentary proceedings Wednesday, less than a week before the Dec. 2 legal deadline for passing the bill.

Under Friday's deal, the central government will finance the cost increase involved in expanding the free child care program next year for children aged 3 to 5.

The opposition party, which has estimated the increase at 523 billion won (US$472 million), had demanded that the central government shoulder the full amount, while the ruling party had insisted on having the government pay only what local education offices cannot afford.

The parties also agreed to accept the government's proposal to raise cigarette prices by 2,000 won per pack from the current average price of 2,500 won starting next year.

The government announced the plan in September, saying it would help reduce the country's high smoking rate, but critics, including the opposition party, argued it would only increase the financial burden on low-income people.

In return for the cigarette price increase, the parties agreed to scale back corporate tax exemptions and reductions in response to the opposition party's demand for an increase in the corporate tax rate.

The National Assembly is notorious for its end-of-year budget row. The government narrowly avoided drawing up a tentative budget this year as the parliament approved the budget bill on Jan. 1.

This year, the ruling party and National Assembly speaker Chung Ui-hwa have vowed to pass the bill on Dec. 2 to set a precedent of keeping the deadline designated by law.

hague@yna.co.kr
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