Welfare Takes Up 73% of Budget... The Aging 'Bill' Choking Local Finances

[Anchor]

Several basic local governments in the Daegu region are unable to move due to the burden of welfare costs caused by aging, leading them to scrap various projects. The declaration of a "financial state of emergency" is spreading like a trend.

TBC reporter Jeon Hyeong-seo took a closer look at the aging "bills" arriving at each local government.

[Reporter]

Just a month into taking office, Gyeonggi Province Governor Choo Mi-ae even cut the budget for fire trucks.

[Choo Mi-ae / Governor of Gyeonggi Province (August 5): As of this hour, I officially declare a financial state of emergency in Gyeonggi Province.]

The declaration of a financial emergency spread like a trend.

Following metropolitan governments such as Incheon, basic local governments including Pohang, as well as Nam-gu and Sasang-gu in Busan, have successively pulled out red cards.

In Daegu, Dalseo-gu has decided to scrap projects worth 60 billion won.

For Dalseo-gu, which has a budget exceeding 1 trillion won, this situation occurred because its emergency fund, the "Integrated Fiscal Stabilization Fund," has only 300 million won left.

We looked into why things reached this state.

The largest portion of Dalseo-gu's annual budget is social welfare expenses, accounting for 73% of the total.

This means there is no money left to spend elsewhere.

Being a mega-sized autonomous district with a population of 520,000, the number of elderly residents it must support alone reaches 100,000, a scale comparable to the entire population of Jung-gu.

However, government support is lower than in other regions.

This is because basic pensions and other funds are distributed based on the "proportion of elderly people" rather than the "number of elderly people." Two years ago, Dalseo-gu, Suseong-gu, and Jung-gu, where the proportion of elderly residents was under 20%, were structured to receive only 80% in national subsidies.

The remaining regions, where the elderly proportion exceeds 20%, receive 90% of the basic pension from the national budget.

As the burden of elderly welfare increases, there is an ironic situation where the proportion of elderly people must continue to rise.

Basic local governments, where every single coin counts, are shying away from national projects that require them to cover district expenses.

[Kim Yong-pan / Head of Dalseo-gu Office, Daegu: Last year and this year, 15.0 billion won of our own funds was used for livelihood coupons and high-oil-price damage support amounts. I just pray and pray again that (the government's) cash-like welfare policies do not come down again. I can only earnestly hope. That is my heart.]

For the same reason, Sasang-gu in Busan reduced dementia care facilities, and Daejeon reduced transportation support for the elderly.

There is also no guarantee that essential welfare budgets for vulnerable groups will not be cut next time.

[Lee Jae-won / Professor, Division of Public Administration and Welfare, Pukyong National University: Standard national projects should be transferred to national affairs, and areas where leeway is created should allow local governments to provide various services—such as care services—under their own responsibility.]

As the aging of the first-generation new towns that moved in during the early 1990s accelerates nationwide, the "swamp of welfare costs" is deepening over time.

(Video reporting: Park Jong-young from TBC, Design: Byun Hyung-il from TBC)

Jeon Hyeong-seo, TBC
※ Please note: This article was translated by AI and may contain errors.