There are many arguments about an amount of government debt among the Administration, political parties, the academia, and the media. Therefore, the administration tries to make new fiscal statistics system switched to accrual-basis accounting from cash-basis accounting. It changes a scope of general government based on GFS (Government Finance Statistics) 2001 of IMF.
However, this new system is only updating number in statistics for the submission to international institutions. Thus, this is not overall reform of the fiscal statistics system for stopping the arguments. Also, there are still worrisome about the amount of government debt that will be increased in the future and have to be paid by people. We may, therefore, reasonably suggest below additional considerations.
First of all, we have to reexamine scope of general government except three special accounts of the Korea Post. The Korea Post is a subordinate institution under the Ministry of Knowledge Economy, the government department which manages the industries, etc. It follows that there are strong controls by the government such as the power to appoint the chief of the Korea Post, budget, and the plan of asset and surplus fund. Viewed in this light, it is unreasonable that the Korea Post is classified as quasi-corporation. According to “GFSM 2001” 2.22, it is desirable that three special account of the Korea Post would be classified as general government account.
Secondly, the marketability test for 24 private-operating funds needs to be reviewed again because of the concept of an institutional unit. The fund cannot be regarded as a separate institutional unit because the fund does not independently transact a business with legal obligation and does not have liabilities in own accounts. So, it is not suitable to conduct the marketability test by operational institution.
Thirdly, there needs to set a guideline for recording the liability which will be realized by unfunded pension scheme of the public pension fund.
Lastly, we have to improve the issues in line with consistency on the fiscal statistics between budget and settlement. Also the fiscal information provided to the National Assembly should be broaden, which all had not been mentioned in the administration’s new system proposals.
However, this new system is only updating number in statistics for the submission to international institutions. Thus, this is not overall reform of the fiscal statistics system for stopping the arguments. Also, there are still worrisome about the amount of government debt that will be increased in the future and have to be paid by people. We may, therefore, reasonably suggest below additional considerations.
First of all, we have to reexamine scope of general government except three special accounts of the Korea Post. The Korea Post is a subordinate institution under the Ministry of Knowledge Economy, the government department which manages the industries, etc. It follows that there are strong controls by the government such as the power to appoint the chief of the Korea Post, budget, and the plan of asset and surplus fund. Viewed in this light, it is unreasonable that the Korea Post is classified as quasi-corporation. According to “GFSM 2001” 2.22, it is desirable that three special account of the Korea Post would be classified as general government account.
Secondly, the marketability test for 24 private-operating funds needs to be reviewed again because of the concept of an institutional unit. The fund cannot be regarded as a separate institutional unit because the fund does not independently transact a business with legal obligation and does not have liabilities in own accounts. So, it is not suitable to conduct the marketability test by operational institution.
Thirdly, there needs to set a guideline for recording the liability which will be realized by unfunded pension scheme of the public pension fund.
Lastly, we have to improve the issues in line with consistency on the fiscal statistics between budget and settlement. Also the fiscal information provided to the National Assembly should be broaden, which all had not been mentioned in the administration’s new system proposals.
Yoon Yongjoong, Lee Kangkoo, Youn Junseung, Suh Jaeman, Kim Jungmi