Only city/provincial government to maintain fiscal soundness (no new government bonds issued) in the face of decline in local taxes for three consecutive years; budget (KRW 10.9247 trillion) is 3.2% (KRW 337.5 billion) higher than previous year’s figure
Daegu Metropolitan City (DMC) submitted a budget* to the Daegu Metropolitan Council for 2025 for KRW 10.9247 trillion, an increase of roughly 3.2% (KRW 337.5 billion) compared to that of 2024.
* Total budget: KRW 10,924,700,000,000 (3.2% higher (KRW 337.5 billion) compared to 2024 figure)
– General accounts: KRW 8,769,500,000,000 (5.1% higher (KRW 424.4 billion) compared to 2024 figure)
– Special accounts: KRW 2,155,200,000,000 (3.9% lower (KRW 86.9 billion) compared to 2024 figure)
Even amid the difficulties caused by a drop in tax revenue, DMC has managed to be the only municipal/provincial government in Korea to maintain fiscal soundness (i.e. no new government bonds issued) for three consecutive years.
DMC’s goal is to manage its finances responsibly while boosting the city’s growth potential via fiscal soundness—in other words, minimize future generations’ financial burden while also devoting sufficient resources to the completion of Innovation Daegu 100+1 and citizen welfare.
In the second half of 2024, the global economy’s high price-high interest stance was relaxed, accompanied by a modest increase in Korea’s export volume. DMC, nevertheless, is anticipating a local tax revenue dip for three years given the sharp decline in acquisition tax revenue (KRW 94.4 billion less than 2024) next year due to a decrease in the number of apartment flats occupied.
※ Status of local tax revenue for 2023-25 (as of variations compared to fixed budget)
- (second supplementary budget for 2023): KRW 389.2 billion, (main budget for 2024): KRW 294 billion, (proposed main budget for 2025): KRW 31 billion
※ Expected local tax revenue in 2025: KRW 3,353,000,000,000 (KRW 31 billion less than 2024 figure)
Despite hostile circumstances, DMC maximized its financial efficiency without issuing bonds through strategic, priority-based distribution of resources that ensures a virtuous cycle of growth and distribution.
DMC will be using its fiscal soundness to apply finishing touches to Innovation Daegu 100+1, a roadmap that ensures prosperity for the next 50 years, and not cut any corners on citizen welfare.
□ Three guiding principles for 2025 budget
First, concentrated investment in completion of Innovation Daegu 100+1
To prepare for its next 50 years, DMC is planning to allocate KRW 645.5 billion for Innovation Daegu 100+1, which will include the following initiatives: preparing the foundations for future/industrial innovation (e.g. Daegu-Gyeongbuk integration, construction of New Daegu-Gyeongbuk Airport, National Robot Testfield, innovation of civilian life (e.g. benefits for veterans, traffic fee subsidizing for seniors), and global innovation to boost international image (e.g. spatial innovation of waterfront zone, Daegu Marathon).
▶(Daegu-Gyeongbuk integration) Consigning of research for Metropolitan City Comprehensive Development Plan (KRW 500 million), etc.
▶(Future innovation) Consigning of preliminary inspection of Daegu Military Air Base relocation site (KRW 5 billion), etc.
▶(Industrial innovation) National Robot Testfield (KRW 15 billion), creation of local digital innovation hubs (KRW 2.1 billion), etc.
▶(Innovation of civilian life) Veteran subsidy (KRW 14.2 billion), loss subsidizing of free bus fares for seniors (KRW 31.1 billion), etc.
▶(Spatial innovation) Sincheon Stream marriage proposal site (KRW 6.6 billion) and The Ark cultural tourism revitalization (KRW 11.2 billion), etc.
▶(Administrative/financial innovation) Regional Innovation System and Education (RISE) plan (KRW 102.6 billion), etc.
▶(Global innovation) Daegu Marathon (KRW 2.2 billion), Daegu Chimac Festival (KRW 1.4 billion), etc.
Second, fortified citizen welfare and alleviation of welfare dead zone
Despite hostile financial circumstances, DMC is planning to allocate KRW 5.6 trillion to expanding investments for civilian livelihood/stability (e.g. livelihood support for socially-underprivileged individuals, rearing of infants/toddlers, jobs for seniors) and alleviate dead zones in welfare (e.g. fortified essential healthcare facilities in outlying areas, reduced livelihood expenses for jeonse scam victims and youth).
▶(Socially underprivileged) Livelihood benefits (KRW 630.5 billion), subsidizing of agricultural produce vouchers (KRW 3.5 billion), etc.
▶(Childrearing) Rearing cost subsidies for infants/toddlers (KRW 167.8 billion), securing of state daycare centers (KRW 3 billion), etc.
▶(Seniors) Basic pension (KRW 1.2268 trillion), subsidizing of jobs for seniors and seniors’ social activities (KRW 157.8 billion), etc.
▶(Emergency healthcare) Subsidizing of emergency care centers in outlying areas that offer treatment in essential healthcare fields (KRW 600 million), etc.
▶(Housing) Support for jeonse scam victims (KRW 700 million), subsidizing of interest on rent/jeonse deposit loans taken out by youth (KRW 3.8 billion)
Third, drastic cutting of conventional/inefficient projects
DMC conducted an in-depth analysis of the timeliness and effectiveness of municipal projects, with outcomes serving as the basis for priority reorganization and drastic re-structuring of expenditure (e.g. cutting conventional/ineffective projects). The funding saved in this way was used to maintain fiscal soundness and, most importantly, invest in key projects.
▶(Streamlining of support method) Launch of open application/evaluation system for local cultural events (KRW 500 million), etc.
▶(Diminishing/elimination of conventional, low-return projects) Our Village Education Share (KRW 1.1 billion), subsidies for native English speaker teacher aids (KRW 300 million), etc.
▶(Integration of similar/overlapping projects) Subsidizing of at-home senior caretaking service (KRW 3.6 billion, etc.)
□ Key areas of investment for 2025 budget
① Establishment of foundation for key projects that will determine Daegu’s next 50 years
A total of KRW 22.4 billion will be invested in establishing the foundations for projects that will define Daegu’s next 50 years (e.g. preparations for Daegu-Gyeongbuk integration, construction of New Daegu-Gyeongbuk Airport)
For the successful launch of Daegu-Gyeongbuk Special Metropolitan City, KRW 500 million will be spent on consigning the drawing up of an integrated development plan, KRW 400 million for consigned organizational diagnosis of Daegu-Gyeongbuk integration, and KRW 1 billion on the formation of citizenry acceptance/understanding of Daegu-Gyeongbuk integration.
To ensure the opening of Daegu-Gyeongbuk New Integrated Airport in 2030, KRW 5 billion will be spent on consigning a basic investigation of the lot for Daegu Military Air Base’s relocation, KRW 500 million for the consigning of relocation of US military facilities inside Daegu Military Air Base, and KRW 3.2 billion for the construction of a three-lane beltway over Camp Walker’s former lot. All of these developments are expected to facilitate urban development.
② Reorganization of five future industries and fortification of local economy
A total of KRW 480.9 billion will be invested to secure economic growth (e.g. reorganizing five future industries), creating a corporate-friendly urban environment, and fortifying Daegu’s economy.
Funds have been allocated (KRW 15 billion) to purchase the lot for the National Robot Testbed as part of efforts to make the robotics industry more competitive and KRW 1.5 billion for next year’s Future Innovation Tech eXpo (FIX), whose success this year highlighted the growth potential of Daegu’s new industries.
For the cultivation of new industries, KRW 2.1 billion will be spent on building digital innovation hubs in Suseong Alpha City, KRW 2.5 billion on commercializing AI-based wireless electrical transmission technologies, KRW 600 million for semiconductor-specializing universities, KRW 500 million for laying a foundation for the UAM industry, KRW 1 billion for the construction of Powerful ABB Empirical Factories at local manufacturing sites (to facilitate the application of ABB technologies), and KRW 300 million for empirical testing at ABB testbeds (e.g. voice-recognizing kiosk).
Furthermore, to revive the local economy and domestic/foreign investments, KRW 1 billion will be devoted to cultivating local venture startups, KRW 3.2 billion to developing growth engines for promising companies (e.g. Star companies, Powerful companies), KRW 43.8 billion as a subsidy for attracting domestic/foreign investments, and KRW 300 million for the One-Stop Corporate Support Fair, the only event of its kind in Korea (as of 2024).
③ Spaces to maximize the quality of urban life
A total of KRW 1.678 trillion will be spent on creating spaces that maximize the quality of urban life, from waterfront zones to inner-city areas, that elevate the quality of citizens’ living environment and the city as a whole.
In terms of the Geumhogang River, KRW 6.4 billion will be spent on improving riverfront spaces in Dongchon Recreation Area, KRW 11.2 billion on revitalizing The Arc Culture Plaza for the installation of a pedestrian bridge, and KRW 1.3 billion for the operation of riverfront pool/leisure facilities (in July 2025).
For Sincheon Stream, KRW 6.6 billion will be spent on a marriage proposal site and KRW 1.2 billion on installing street lamps along walking trails for nighttime safety.
Furthermore, to revive Daegu’s depressed economy, KRW 600 million will be spent on rebuilding the former Jungang Police Station and building a plaza and alleys for the Dongseong-ro Renaissance Project, KRW 800 million for revitalizing Dongseong-ro’s commercial district, KRW 300 million for infrastructure-building for the Dongseong-ro Renaissance Project, and KRW 200 million for revitalizing youth busking.
For improving road/traffic infrastructure and balanced expansion of Daegu, KRW 20.4 billion will be spent on constructing subway line 4, KRW 5 billion on constructing an entryway for Geumho Waterpolis, KRW 24 billion for constructing a metropolitan road connecting Dasa and Waegwan and KRW 31 billion for one connecting Joya and Dongmyeong, and KRW 30 billion for converting Sanghwa-ro into a multi-level road.
④ Investments in culture/tourism
A total of KRW 294.7 billion will be invested in culture and tourism to make Daegu’s residents proud of their city and enhance Daegu’s visibility in the international community.
KRW 2.2 billion will be spent on the Daegu Marathon to make it one of the world’s seven major marathons, KRW 1 billion for the hosting of World Masters Athletics Daegu Championships 2026, KRW 1 billion on renovations for Daegu International Shooting Range to make it suitable for international competitions, and KRW 100 million for a soccer match between Daegu FC and Chengdu Rongcheng FC to celebrate the tenth anniversary of Daegu’s sister city relations with Chengdu (China).
A total of KRW 19.7 billion will be invested in Daegu Opera House, the only one of its kind in Korea and that celebrated its 21st birthday this year, ahead of its reopening in October 2027. This includes KRW 1.1 billion for a new blueprint for facility-wide renovations (e.g. aged stage facilities).
Furthermore, KRW 5.8 billion will be spent for the operation of Kansong Art Museum Daegu, which was visited by 70,000 in its first month (since being opened in September) and has already become a cultural landmark. Funding will also be devoted to improving the quality and visibility of Daegu’s festivals, including KRW 1.4 billion for the already-famous Daegu Chimac Festival.
⑤ Fortified citizen welfare and benefits for socially-vulnerable groups
A total of KRW 5.3002 trillion has been allocated to improve citizen welfare in tangible ways and provide more benefits for socially-vulnerable groups
A fund will be compiled (KRW 31.1 billion) to absorb the cost of providing public transportation free to seniors. KRW 1.3 billion will be spent on operating demand-responsive transport (DRT) buses for five routes (no. of currently operated routes: 3).
Funding has also been set aside (KRW 14.2 billion) for a significantly larger monthly subsidy for veterans (KRW 130,000 -> KRW 200,000) and to help jeonse scam victims (KRW 700 million) defray livelihood and moving costs.
Another area of focus is public healthcare. Priority will be given to preventing the failure of healthcare services from being provided, including KRW 600 million for emergency healthcare organizations, KRW 16.6 billion for the construction of a comprehensive outpatient clinic at Daegu Medical Center, KRW 2.5 billion for healthcare innovation, and KRW 5 billion to hire more healthcare personnel (20).
A total of KRW 5.3 billion will be spent on fertility treatment, averaging KRW 1.7 million per treatment, the highest amount in Korea. KRW 2.4 billion will be spent on education vouchers for children of financially-vulnerable families (KRW 200,000 per person), with KRW 3.5 billion spent on agricultural produce vouchers (thus far provided only in Dalseong-gun on a trial basis) for all nine districts/counties.
To cultivate the next generation of workers who are trained in high-need industries, KRW 102.6 billion will be spent on the Regional Innovation System and Education (RISE) plan and KRW 1 billion for IB (International Baccalaureate) experts (for effective trial operation of the Educational Development Special Zone).
⑥ Fortification of public safety measures
A total of KRW 494.7 billion will be spent on improving safety-related measures.
Firstly, KRW 1.1 billion will be spent on improving treatment of firefighters. The per-meal unit cost* for firefighters will be increased to KRW 7,425, the highest in Korea.
* DMC’s per-meal unit cost: KRW 4,110 (2024) → KRW 7,425 (2025) / Average cost for other metropolitan cities: KRW 5,656
To improve firefighting facilities, KRW 5.8 billion will be spent on moving the 119 Situation Room to the new headquarters of Daegu Fire Services, which is being housed in its own building in 26 years, and KRW 6.6 billion on moving Dongbu Fire Station to a new building and the construction of Daegu Firefighting Academy. Both are scheduled to be completed by June 2025.
For citizens’ safety, KRW 900 million will be spent on insurance for 17 natural/manmade disasters (e.g. natural disaster, explosion, fire, traffic accident), KRW 16.2 billion on reinforcing safety facilities in disaster-prone regions, and KRW 10 billion on refurbishing facilities in districts prone to storm/flood damages.
Mayor Hong Joon-pyo stressed that the 2025 budget “was put together with a huge sense of responsibility—that we will not burden future generations with our debt—and based on strict adherence to our ‘no bond’ policy for three years.”
Hong also said, “We increased funds devoted to Innovation Daegu 100+1, the blueprint for our city’s next 50 years of prosperity, as well as welfare benefits to socially-disadvantaged groups. Once Daegu-Gyeongbuk Special Metropolitan City is launched, it will become Korea’s second-largest and second most important city that props up the nation together with Seoul Metropolitan Government. By securing an annual budget of at least KRW 2 trillion, such as through the Metropolitan City Fund, we hope to accelerate our efforts to becoming a major city that is second only to Seoul.”
DMC’s proposed budget for 2025 will be reviewed at the 313th Meeting of the Daegu Metropolitan Council, after which it is expected to be approved on December 12 (Thu).
