Retroactive compensation for small businesses too complicated?

Rep. Choi Seung-jae of the main opposition People Power Party speaks during a press conference at the National Assembly in Seoul, Monday, urging the ruling party and the government to offer retroactive compensation to small business owners who suffered lost earnings due to administrative orders since the outbreak of the coronavirus. Yonhap

By Lee Min-hyung

The ruling and opposition parties remain poles apart in their views on whether the government should provide retroactive compensation for small business owners to help compensate for losses incurred since the outbreak of the COVID-19 pandemic last year.

The ruling Democratic Party of Korea (DPK) decided not to provide retroactive compensation for small business owners whose sales were hit hard by administrative orders that forced bars, restaurants and other establishments to close temporarily or reduce their hours of operation due to the pandemic. The ruling party and the government also offered, instead, to widen support for 10 more business sectors ― such as travel, education and transportation ― hit hard by the pandemic shock.

The decision was made because it was realistically difficult for the government to force small business owners to return their cash assistance provided earlier.

“We are going to offer a package of financial aid to the self-employed and small business owners in the form of previously provided cash assistance or super-low-interest-rate loans,” Rep. Song Gap-seok from the ruling party said during a briefing, Tuesday.

But the main opposition People Power Party is stepping up criticism of the ruling party's decision, urging it to provide retroactive compensation to virus-hit small business owners.

The opposition party argued that the ruling camp and the government should be fully responsible for the losses suffered by small business owners, who had to endure huge losses after the government started restricting their business hours last year.

“The government should reconsider its decision not to provide full compensation for the losses suffered by vulnerable groups,” said Lee Eun-joo, spokesperson for the progressive Justice Party. “Offering retroactive compensation for any losses due to the government's administrative order is a move to realize the spirit of the Constitution and this is a natural procedure for the public who made sacrifices for the country.”

The National Assembly passed this year's first supplementary budget of 14.9 trillion won in March, and half of it was spent on helping small business owners. The government is in the process of deciding on a second extra budget worth around 20 trillion won to 30 trillion won. The exact amount has not been confirmed.