Free childcare for under-fives is a key welfare policy of the Park Geun-hye administration. The new program, which directly subsidizes daycare tuition or home care allowances for parents with children aged up to 5, is in danger of stopping in its first year.
Most of the nation’s 16 provincial and metropolitan governments will see their childcare budget dry up within months. In the case of Seoul, the fiscal depletion will come as early as June because the capital city will run 405 billion won ($36.5 million) short of its annual needs ― a gap the government was supposed to fill through related legislation but has not.
In total, the central government should chip in 1.4 trillion won this year to jack up the share of its subsidy from 50 percent to 70 percent of total fiscal need, as the National Assembly unanimously decided in November.
But the governing Saenuri Party has been dragging its feet over legislation, influenced by the recalcitrance of the Ministry of Strategy and Finance to allocate the additional spending. Ministry officials say they will come up with measures by June when the Assembly opens an extra session. By that time, some local administration will begin to cease providing subsidies, raising questions about the ministry’s seriousness in solving the problem.
The central government blames local administrations for allocating budgets that are too small for the new program, while the latter accuses the former of passing financial burdens of presidential pledges to provinces and municipalities already reeling with dwindling revenues because of a real estate market slump and sluggish tobacco tax receipts. Voters have lost their words in the face of this egregious avoidance of responsibility between central and local governments.
President Park should step in and tell her finance minister to take moves ― allocate the budget ― before it gets too late.
Financial bureaucrats, who had long opposed the free childcare as a typical ``populist” policy, are suspected of deliberately delaying the subsidy provision to cause ``childcare crisis” and shoot down other welfare programs of the Park administration, with the help of rightist media outlets which have already started to call for a major cutback in Park’s welfare policies.
This hubbub shows that the nation has yet to reach a consensus on the direction it should follow regarding social welfare issues. Conservatives want to benchmark the U.S. system that calls for leaving it to individuals’ ability, while liberals hope it would emulate the European ways of emphasizing social solidarity. Each has its merit, but Korea’s current situation ― a rapidly shrinking middle class, the world’s highest suicide rate and lowest birthrate ― indicate that the American system cannot solve Korea’s ongoing failure in social reproduction system.
President Park has said she could raise financial resources for welfare programs by uncovering more of the underground economy and reducing tax deduction and exemption.
That may help somewhat but the only feasible long-term solution is tax increases. Even in America, the Democrats, whose ideological inclination is not much different from Park’s center-right party, are pushing for tax hikes.
Politicians should be able to say the hard truth and persuade their critics and opponents whenever needed. Or, they must not make promises they cannot keep.