ed Free childcare

All families with children aged up to 5 will be entitled to free childcare from today as the ruling and opposition parties passed next year’s budget bill Monday under the first bipartisan agreement in five years.

Accordingly, families with children under 5 will gain free access to daycare centers or kindergartens regardless of household income. If they opt out, they will receive a monthly allowance of up to 200,000 won in childcare support.

An additional 1.4 trillion won was set aside for next year to carry out the universal program, which was one of President-elect Park Geun-hye’s campaign pledges. This amount is intended to make up for anticipated shortcomings for the program.

It is a far cry from the incumbent government’s childcare initiative in September that made free daycare available to families on the bottom 70 percent of the income ladder after local governments reacted vehemently, citing a shortage of funds for the expanded plan.

Given the desperate need to boost the birthrate, the world’s lowest, and the nation’s ultimate goal of making a welfare state, the free daycare program appears to be a step in the right direction.

Nevertheless, a host of problems remain. First of all, there are concerns that some families may opt not to send their children to kindergartens and use the monthly allowance for other purposes.

The biggest question is finances. The government zigzagged throughout last year over its childcare policy under the parties’ competitive populist maneuvering and this chaotic situation is feared to continue beyond this year owing to chronic budgetary constraints.

It’s lamentable that the rival parties set a bad precedent in the lead-up to agreeing on the universal childcare program. Under the relevant law, the central and local governments are obliged to evenly shoulder expenses for welfare projects under a matching fund scheme. But in the latest agreement, the rival parties broke the rule to allow the central government to bear the burden of 350 billion won to be shouldered by local governments.

The situation doesn’t warrant optimism as far as our revenue and expenditure circumstances are concerned. The long-term outlook for our budgetary situation is hardly bright.

Will the Korean economy run smoothly after the next administration spends 135 trillion won to deliver on Park’s campaign pledges for the next five years? As we argued on this page earlier, Park must review her pledges and readjust her order of priorities.