Lee Yeon-woo is a financial journalist at The Korea Times. Her wide range of reporting includes policies, macroeconomics, stock market, companies and even crypto. She is passionate about connecting the dots in Korean finance and making it easier for foreign nationals to understand. Based on her previous experience as a national reporter, she also has a keen interest in social issues within the sector, including gender equality and ESG. Your tips and insights are always appreciated. You can send them to yanu@koreatimes.co.kr.
Lee confident voucher program to help boost consumption
Merchants at a traditional market in Seoul watch President Lee Jae Myung's press conference, Thursday. Yonhap
By Lee Yeon-woo
President Lee Jae Myung said the government's prepaid voucher program would prove more effective than widely expected, during his first press conference marking 30 days in office on Thursday. But he said there are no immediate plans for additional disbursements.
"This policy clearly has strong effects in terms of income support and redistribution," Lee said at the conference held at Cheong Wa Dae, the former presidential compound in Seoul.
"During the COVID-19 pandemic, Gyeonggi Province took the lead in providing 100,000 won ($73.53) in local vouchers. The central government followed up with a similar measure once. According to research by a government-affiliated institute, it had a significant impact on the local economy, particularly as felt by small business owners," he added.
On June 19, the government decided to hand out prepaid vouchers, with the goal of stimulating consumption amid a sluggish economy. The amount would range from 150,000 won to 500,000 won per person, as part of its 30.5 trillion won supplementary budget.
"There are heartbreaking cases where entire families make extreme choices over just a few hundreds of thousands of won," Lee said. "As a country that prides itself on being among the top 10 economies, I hope we no longer suffer over basic needs like food."
However, he said there are "no plans to provide additional vouchers," noting that "the fiscal situation does not allow further spending."
At the same time, Lee signaled broader real estate reforms ahead. He said that recent housing loan regulations are "merely a teaser," pledging to redirect the concentrated capital from real estate to the financial markets.
On June 27, the government issued strong measures to curb soaring household debts and real estate prices, including a 600 million won loan cap for home purchases in the capital area.
"There are still many demand-suppression measures remaining," Lee said. "As long as we accelerate the pace of supply, there should be no cause for concern."
Lee also expressed concerns about concentration in the capital region and the subsequent regional imbalance.
"In the past, concentrating resources in the capital region and a few major conglomerates was considered a growth strategy. But now, we're starting to see the side effects of that approach," Lee said.
"When it comes to policymaking and budget distribution, it's no longer enough to simply take the regions into account. I believe we must adopt a region-first approach to begin restoring a sense of balance," he added.
Regarding the timeline for implementing a 4.5-day workweek, he said "the current level of conflict and polarization makes it unfeasible," so it should be approached gradually through social dialogue.
"We need to improve labor productivity while also reducing working hours to make work-life balance a reality. This is a global trend," Lee said. "As this becomes more established as a broader social shift, I believe the 4.5-day workweek could become a realistic and achievable goal."
"I would like to move toward it as quickly as possible," Lee said. "I’m sorry that we haven't yet been able to make meaningful policy progress on this issue."