Gyeonggi Province to Repay All 3.2 Trillion Won in Debt by 2018

Governor Nam Kyung-pul of Gyeonggi Province declared the province's historic "Gyeonggi Province Zero Debt Era" on the 11th, based on financial restructuring and fiscal reform achieved through bipartisan cooperation.

Governor Nam held a press conference at the provincial government office and stated, "The debt that reached 3.2686 trillion won at the time of the launch of the sixth civilian administration will become 'zero' next year," and added, "Gyeonggi Province will be free from the burden of debt that has weighed on its shoulders and will be able to envision the future with a light heart."

Governor Nam said, "Since the launch of the sixth civilian administration, Gyeonggi Province has made every effort to secure financial resources and reduce debt. As a result of organizing a task force and systematically securing national treasury funds, we have set new records for the budget each year and secured the largest amount of national treasury funds in history. We also boldly corrected past practices such as vague standards for public institution budget planning and reckless issuance of local bonds," he explained.

When the sixth civilian administration was launched in July 2014, Gyeonggi Province had 3.2 trillion won in general account debt. Since taking office, Governor Nam has made efforts to repay debt centered on fiscal reform, including restructuring of wasteful budget structures and preventing indiscriminate budget waste.

First, to expand revenue, the province concentrated efforts on ▲securing national treasury funds ▲discovering hidden tax sources.

To systematically secure national treasury funds, the province organized a task force for national treasury fund acquisition, achieving the result of "breaking through 10 trillion won in national treasury funds" since 2015. Through this, the province supplemented insufficient financial resources and alleviated Gyeonggi Province's fiscal burden.

In 2014, the province newly established a Tax Revenue Management Division and implemented, for the first time nationwide, home searches of tax delinquents and public sale of movable property seizures and seizure of financial assets. Through such active tax revenue enhancement activities, the province discovered hidden tax sources and increased revenue.

At the same time, the province also proceeded with expenditure restructuring efforts to stop "budget leaks."

First, the province issued instructions for fundamental review of various investment projects and subsidized projects and organized consolidation of similar and duplicate projects. Through expenditure restructuring via fiscal project evaluation, the province saved approximately 170 billion won as of June 2017 alone.

Second, the province established guidelines for public institution budget planning and promoted fiscal normalization through evaluation linkage with public institutions. It also led normalization of wasteful welfare systems and excessive allowance arrangements that had been flagged as abnormal.

Finally, the province strengthened fiscal capacity through budget execution faithful to principles. It made every effort to suppress local bond issuance, issue bonds within repayment ranges, and improve fiscal conditions. The province mandatorily applied the pay-go principle and strengthened fiscal discipline through investment reviews.

As a result of such efforts, the province repaid 1.4787 trillion won by the end of 2015, and fully completed repayment of unpaid statutory expenses from the debt by the end of 2016.

Subsequently, in this year's first supplementary budget, the province allocated 252.3 billion won for early debt repayment, lowering the debt to 608.4 billion won, a decrease of 81.3% from the time of launch of the sixth civilian administration.

To complete the "Zero Debt" goal, Gyeonggi Province plans to allocate budget in the 2017 supplementary budget and 2018 main budget to repay the remaining debt balance of 608.4 billion won. This will complete the repayment of a total of 3.2 trillion won in debt through financial restructuring and fiscal reform.

Governor Nam Kyung-pul evaluated it as "a miracle and something unimaginable," and then said, "Today's miracle is a great victory of Gyeonggi Province's bipartisan cooperation," expressing gratitude to the provincial assembly for their joint efforts toward "Zero Debt."

Governor Nam stated, "This is the fruit of the special trust between Gyeonggi Province and the Gyeonggi Provincial Assembly. The achievement of Gyeonggi Province's bipartisan cooperation will serve as a model for all local governments nationwide," and emphasized, "The will to reform and overthrow old politics and the conviction to pursue politics for the people beyond ideology are the strength of Gyeonggi Province and the provincial assembly that cannot be compared to anything else."