Rival parties and the government have agreed to pass next year’s budget proposal, which is set at a record high of 400.7 trillion won ($342 billion). The agreement includes expanding the central government’s budget for the Nuri free childcare program to 8

Rival parties and the government have agreed to pass next year’s budget proposal, which is set at a record high of 400.7 trillion won ($342 billion).

The agreement includes expanding the central government’s budget for the “Nuri free childcare program” to 860 billion won and raising income taxes on high earners.

The corporate tax hike, which the opposition parties have long demanded be returned to the rate it was before the Lee Myung-bak administration, however, was not included in the agreement.

The National Policy Committee member lawmakers — ruling Saenuri Party Rep. Kim Gwang-lim, main opposition Democratic Party of Korea (DPK) Rep. Yun Ho-jung and People’s Party Rep. Kim Sung-sik — and Strategy and Finance Minister Yoo Il-ho said they came to an agreement on Friday, the deadline for passing the 2017 budget plan at the National Assembly.

Under the agreement, the government agreed to unburden nearly half of the total Nuri program budget from local governments. It is expected to establish the three-year special account to support the program through the central government’s general grants worth 860 billion won, or 45 percent of the total Nuri program budget next year.

Local education offices will be responsible for the remaining 55 percent.

Rival parties, however, have decided not to raise corporate taxes. In 2009, the Lee administration cut the corporate tax rate from 25 percent to 22 percent in hopes of enlarging domestic investment and employment by corporations.

Pointing out they are stockpiling cash for themselves instead of putting it back into investment or employment, though, opposition parties, which command a majority in the 300-member National Assembly, have sought to raise the rate to its previous level of 25 percent.

It is feared the hike could jeopardize the government’s effort to bottom out the nation’s near-death economy where many countries are competing to attract foreign businesses through cutting taxes.