The continuing economic recession since the foreign currency crisis and the ensuing drop in tax revenue have put severe pressure on government finances and its efforts to stimulate the economy and to build a social safety net. A strong policy to solidify government finances is called for in order to prevent the accumulation of national debt and weakening of financial regulations.
The budget saving incentive system is a "measure to improve budget execution practices and systems in an attempt to enhance budget efficiency by rewarding those who have contributed either to increase tax revenue or cut expenditures." The reward shall be granted from the saved budget. The budget saving incentive system is proposed as the key to securing financial integrity through efficient utilization of limited financial resources, boosting government employee morale through incentive offers, and improving the productivity of the public sector through improving the work practices in the government community.
The current study investigates Korea's budget saving incentive system from the viewpoint that active implementation of such systems either currently under implementation or under plans, is in need to secure the integrity of government finance, to boost the morale of government employees, and to raise the productivity of the public sector. The study looks into the current status and challenges of the budget incentive system and the government employee suggestion system. The taxpayer lawsuit system whose introduction is in talks will also be mentioned as one of the means for outside control to cut the budget.
The current budget saving incentive system is exposed to major problems such as the existence of similar systems with overlapping features, lack of participation from the private sector, and insufficient degree of interest from government entities. The general perception is that the incentive system fails to live up to its original purpose caused by passive attitude on the part of government employees fearing budget cuts in the future, and budget management focused on revenue increase.
The system calls for increasing the amount of intensives, expanding the extent of incentives to apply to more cases, and revising the incentive application and review process to ensure fairness.
Solutions include comprehensive improvement on the budget saving incentive program such as coordination/integration of the suggestion system and budget saving incentive system ( Merger of the suggestion ① review committee and the review committee, Integration of bonuses ② for the suggestion system to the budget saving incentive fund, ③ Expansion of the scope of the suggestions eligible for the award, ④ Merger of the two systems), stronger participation from the general public (active advertisement, establishment of an information disclosure system, taxpayer lawsuit system), and collaboration with comprehensive
assessment by agencies, and upgraded authority to the review committee.
Methods to improve the budget saving incentive system include expanding the eligibility for the award, increase in the amount of incentives as well as the number of cases granted, additional incentives, improvements in the review process to ensure fairness, and solidifying the management of the budget saving incentives.
우리나라의 예산절약 인센티브제도에 관한 연구(A study on budget saving incentive system in Korea)
|Subject Country||South Korea(Asia and Pacific)|
|Subject||Economy < Economic Administration|