As the final special session of the 20th National Assembly begins, a supplementary budget for COVID-19 relief grants is currently under review. The government agreed on providing up to one million won for the households in the bottom 70 percent of income and passed it to the National Assembly on Thursday right after the general elections. However, the ruling Democratic Party of Korea now argues that the grant should be extended to everyone, sparking yet another controversy, while the Liberty Korea Party, the main opposition party, has not determined its stance on the grant yet. It suggested offering 500,000 won to everybody during the election campaign, but it is now calling for a review.
The government’s emergency relief grant was initially going to be provided only for the households in the bottom 50 percent of income due to the government’s finances. However, the ruling party pushed it up to 70 percent and is now trying to extend it to 100 percent. To be sure, everyone deserves a grant as we are all suffering both physically and mentally because of the novel coronavirus outbreak. If the grant is given to everyone, it can also save the time and costs that go into eligibility check.
However, the government’s funds should not be wasted especially at a time when there is much uncertainty of COVID-19 across the globe. The government was going to secure 9.7 trillion won for the COVID-19 relief grant by adjusting expenses of central and local governments. However, giving everyone the grant would require more than 13 trillion won. If the government has little room to adjust costs incurred by the pandemic outbreak, it has to issue government bonds. Although it is important to keep election promises, the grant should only be provided according to the government’s proposal. It would be ideal if the grant could be given to everyone and retrieved from high income earners later through taxes, as suggested by Prime Minister Chung Sye-kyun. However, it presents two challenges: It remains unclear how the grant will be retrieved and how the government will secure funds.
The government spending is expected to grow as the economic impact of the coronavirus materializes. The number of people who found jobs decreased by 200,000 in March while the number of people on furlough skyrocketed to 1.6 million. Short-term part-timers and special employees who are not covered by the employment insurance needs financial support, and so do employees of businesses that are struggling with a sharp drop in demand and production.
Healthcare experts suggest that the world might be hit by COVID-19 again in the winter or next year. The government should not use up all the resources it has as there could be a second and third wave of economic shocks. The current grant proposal may not be perfect, but it is more important to provide the grant as planned without further delay.