The ruling party and the government on Tuesday agreed to draw up the biggest ever annual state budget of 605 trillion won ($518.7 billion) for 2022 to finance the country's efforts to tackle the COVID-19 crisis.

This represents a slight increase from this year's budget of 604.7 trillion won, including the regular budget of 558 trillion won and two rounds of COVID-19 response extra budget, they said.

"The party and the government shared their commitment to allotting sufficient resources needed to completely overcome COVID-19 through proactive expansionary financial policies and spur speedy economic recovery," Rep. Park Wan-joo, the Democratic Party's policy committee chief, said, following the party's consultation with the government side.

According to Park, next year's budget will include an additional 1.8 trillion won to compensate small business owners ravaged by anti-virus social distancing measures as the unexpected spread of COVID-19 variants weighs down the efforts to combat the coronavirus crisis.

"The 2022 budget will also finance a sharp expansion of infrastructure for contagious disease prevention ... as well as the procurement of vaccines, enough to inoculate the entire nation against COVID-19 variants," Park noted.

He also said more than 20 trillion won will be earmarked for a package of support measures for young people under economic pressure, while a drastic increase in the wages for military conscripts will be part of the upcoming budget.

Another 2.5 trillion won will also be set aside to form a climate change response fund, dedicated to paving the way for the transition to a carbon-neutral economy, he added.

Earlier, DP floor leader Yun Ho-jung urged the government, during the meeting, "to spur a more inclusive economic recovery by having more confidence in expansionary financial (policies) as the national finance is expected to improve thanks to an economic recovery-driven increase in tax revenues." (Yonhap)