South Korea to propose $3.8b extra budget

SEOUL, Mar 15 (Reuters): South Korea said on Thursday it would propose a four trillion won (US $3.8 billion) supplementary budget and boost business subsidies to help cut the country's high youth unemployment, which it sees reaching a dangerous level.

Youth unemployment in South Korea hit record levels last year. By offering more incentives, President Moon Jae-in hopes to increase the full-time job prospects for millennials in the face of challenging job market conditions, which has prompted many to postpone their marriage and pushed others into poverty.

"To turn the youth employment situation around, which is at a disastrous level, we need financial resources," Moon said in a cabinet meeting. "An extra budget to add jobs for young Koreans is inevitable," the president added.

The government is proposing to give small-and medium-sized businesses nine million won ($8,443.65) in annual cash subsidies for each entry-level job they create over the next three years, up from the current 6.7 million won.

High school and college graduates will also be able to receive bigger subsidies while job-searching, and will be exempt from income taxes for the first five years of full-time employment, subject to certain conditions.

The government plans to submit in early April the extra budget bill to the National Assembly, where Moon Jae-in's Democratic Party holds 41 per cent of the 293 seats.