The document summarizes the fiscal status and budget of Seoul Metropolitan City, emphasizing the need for innovation in public services. It outlines that 54.3% of Seoul's budget is spent on programs, with operating costs and debt redemption accounting for smaller shares. It also notes the annual growth of Seoul's budget and tax revenue, as well as expenditures on welfare and development programs. The document advocates for financial soundness, fiscal decentralization, community involvement, and improved incentives to motivate innovation in public services delivery. It provides examples of Seoul's public investment services and an "Ondol-welfare" project that aims to develop social safety nets through local networks.

1. Budget of Seoul City and
the Necessity of Innovation
in Public Service
2012.6.13
Seoul Development Institute
(Jun Sik Bae)
1

2. Contents
1. Fiscal Status of Seoul Metropolitan City
2. Essentials for Public Services Innovation
3. Case Studies in Public Budgeting and
Public Services
2

3. 1. Fiscal Status of Seoul Metropolitan City
Seoul
Metropolitan
Government
Population:
10,520,000
3

4. (1) The Budget of Seoul Metropolitan City
Reserve Fund
2%
Operating Cost 6 %
supporting Fund
Program Cost 35%
54.3%
Debt Redemption
3%
 Source : Seoul Metropolitan Statistics(2012)
 Units(%) = Ratio of Total Budget
4

5.  Share of Seoul City in National Budget
250,000,000
7.0%
8.4% 7.4%
200,000,000
8.1%
8.2%
7.3%
150,000,000 8.7%
8.8% 9.4%
7.7%
8.4%
100,000,000 7.8%
7.5%
50,000,000
-
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Seoul City's Budget National Budget
 Source : Seoul Metropolitan Statistics(1999-2012)
 Units : Million Won, %
5

6.  Structure of Budget Spending in Seoul Metropolitan City
30%
25%
20%
15%
10%
5%
0%
Administrative Public Safety Walfare Education Environment Culture Development
2008 2009 2010
 Source : Seoul Metropolitan Statistics(2008-2010)
 Units(%) = Ratio of Total Expenditure
6

7. (2) Tax Revenue of Seoul Metropolitan City
 Annual Tax Revenue
14,000,000 40%
12,000,000 20%
10,000,000 0%
8,000,000 -20%
6,000,000 -40%
4,000,000 -60%
2,000,000 -80%
- -100%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Tax Revenue Growth Rate
 Source : Seoul Metropolitan Statistics, General Accounting (1996-2012)
 Units : Million Won,%
7

8.  Annual Gab between Budget and Real Revenue in Seoul
30,000,000
25,000,000
20,000,000
15,000,000
10,000,000
5,000,000
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Budget RealTax Revenue
 Source : Seoul Metropolitan Statistics(1996-2012)
 Units : Million Won
8

9.  Annual Fiscal Gratification of Seoul
40%
140 31.7%
9.9% 20%
8.7%
120 6.4% -4.9% 3.5%
-4.2% -0.6% -3.1%
-4.3% -6.3% -9.2% -4.4% 0%
100
77 79 -20%
80 72 70
65 66 65 67
60 62 60 61 58 -40%
60
40 -60%
20 -80%
0 -100%
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Fiscal Gratification Growth Rate
 Fiscal Gratification(%)=Standard Fiscal Revenue
/Standard Fiscal Demand
 Source : Seoul Metropolitan Statistics(2000-2012)
9

10. (3) Debts of Seoul Metropolitan City
 Annual Debts
4,500,000 110%
75%
4,000,000
36% 60%
3,500,000
19%
2% 13%
3,000,000
-11% -4% 18% 10%
2,500,000
-33%
2,000,000 -6%
-40%
1,500,000
1,000,000 -90%
500,000
0 -140%
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011
Debts Growth Rate
 Source : Seoul Metropolitan Statistics (2000-2012)
 Units : Million Won,%
10

11.  Annual Financial Independent Rate
100%
95% 95%
95% 95% 95%
95%
93%
90%
90% 89% 89% 89%
86%
83%
85%
80%
75%
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
 Financial Independent Rate = (Ordinary tax + Objective tax- Debts)
/ Total revenue
 Source : Seoul Metropolitan Statistics(2001-2012)
11

12. (4) Welfare and Budget of Seoul City
 Annual Growth Rate of Welfare Budget in Seoul
60,000,000 40%
35%
33.6%
50,000,000 31.3% 30%
25%
40,000,000 20.8% 20%
18.3%
15%
30,000,000 12.8%
9.0% 10%
7.3%
5%
20,000,000
-0.4% 0%
10,000,000 -5%
-8.8% -10%
0 -15%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Walfare Budget Growth Rate
 Source : Seoul Metropolitan Statistics (2004-2012)
 Units : Million Won, %
12

13.  Annual Welfare Investment of Seoul
8,000,000
7,225,797
7,000,000
6,198,364
5,923,746
6,000,000
5,238,599
5,000,000 4,702,265
4,000,000
3,000,000
2,000,000
1,000,000
0
2011 2012 2013 2014 2015
 Source : Seoul Metropolitan Statistics (2012)
 Units (%) = Million Won
13

14.  Tax Revenue vs Welfare Budget
40%
35%
30% 31.3%
20.8% 22.8% 33.6%
25%
20%
12.8% 13.6%
15%
8.0% 7.3% 9.0%
18.3%
10%
4.6%
10.6%
5%
-0.4% -8.8%
0% 3.3%
-5% -0.5%
-7.0%
-10%
-10.2%
-15%
2004 2005 2006 2007 2008 2009 2010 2011 2012
Growth Rate of Tax Revenue Growth Rate of Welfare Budget
 Source : Seoul Metropolitan Statistics (2004-2012)
 Units (%) = Growth Rate
14

15. 2. Essentials for Public Services Innovation
What is Necessary?
Financial Fiscal
Soundness Decentralization
Doing
Together Motivation
15

16. (1) Financial Soundness
 Financial soundness is one of important facing
problems for innovation of pubic services
 Requisites for financial soundness
 Introduce the fiscal rule
 Maximize cost-effectiveness
 Prevent reverse spillover effect
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17. (2) Fiscal Decentralization
 Reform the decentralization system for 25
autonomous districts in Seoul Metro City
 Give greater financial autonomy to 25 districts
 Reform tax system between Seoul Metropolitan
Government and 25 districts in Seoul
 Alleviate financial inequality among 25 districts
 Change paradigm of decentralization
☞ Improve fiscal monopolism by upper level
government
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18. (3) Doing Together
 Encourage community involvement
 Promote private organizations to participate
in public services
 CSR(Corporate Social Responsibility)
☞ Provide advantages for CSR in public procurement
 Invigorate local communities
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19. (4) Motivation
 Compensate districts for the efforts for
public services innovation
 Improve the incentives of Arbitration Subsidy
Program
 Present 3 measures for subsidy incentives
☞ Financial Stability, Soundness & Efficiency
 Add public services innovation as a measure
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20. 3. Case Studies : Public Service Innovation
Seoul Public Investment Service
Ondol-Welfare Project
20

21. (1) Seoul Public Investment Service
 Seoul Public Investment
Service was established
by Seoul Metropolitan
Government in 2012
 Analysis of project feasibility in public investment
project
 Support private investment projects
 Study and education for public officers
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22. (2) Ondol-Welfare Project in Seoul
 Ondol-welfare project refers to share hopes
with the local communities
 Develop local network
 Construct social safety net
 Welfare plan with community map and on-line
22

23. Thank you
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