Cash-in-hand: Mayor pioneers welfare scheme

Seongnam Mayor Lee Jae-myung speaks at his office in Gyeonggi Province on Feb. 5. / Courtesy of Seongnam Municipal Office

By Kim Hyo-jin

Welfare programs drawn up by the mayor of a city located south-east of Seoul have become the focus of a national controversy.

Lee Jae-myung, a second-term mayor of Seongnam, set up three key welfare programs, to which he allocated 19.4 billion won ($16 million) from the city’s budget.

These were designed to provide 1 million won annually for people aged 19-24, free school uniforms for students entering secondary school and 500,000 won in post-pregnancy subsidies to mothers each year.

But amid increasing questions and accusations against Lee that he is pursuing populist policies, the central government is attempting to permanently block the proposed schemes. The Cabinet issued an ordinance that empowers the central government to slash funding for Seongnam’s welfare programs.

Lee, however, did not flinch. He filed a petition in the Constitutional Court on the basis that the central government infringed on the city government’s autonomy and pushed ahead with the welfare plan in January.

“Welfare is a right of citizens who pay taxes. I’m just giving (their money) back through an administrative channel,” Lee told The Korea Times.

“If you think welfare policies are equal to giving free benefits, you’re wrong. It’s a false perception affected by the government, which has been negligent of its basic duty.”

His voice carries some weight. Since becoming mayor of the debt-stricken city in 2010, 450 billion won in debt has been paid off over a period of three-and-a-half years. Since 2014, Seongnam has had the highest financial stability rating in the Ministry of Interior’s regular assessment.

With the city’s larger budget, Lee started increasing welfare spending, first for the elderly and then on child care. His three key welfare programs came in the last stage of his grand welfare scheme, but received the most attention because of the government’s veto.

“I’m using the money on welfare that previously was used to pay back debt,” he said. Lee added that it was possible to have a budget surplus by cracking down on irregularities and corruption, money wasted on public works, and tax evasion.

“It’s just a matter of willingness _ I’m proving that welfare is possible without raising taxes,” he said.

Controversy over populism

Of the three programs, the so-called “Youth Dividend” is the most controversial. It offers 500,000 won in free vouchers to Seongnam residents aged 19-24 that they can use for their job training and living expenses.

However, the program, which aims to support young people amid the high unemployment rate, came under attack because some vouchers were being traded for cash on websites. The unconditional provision of the subsidies was also questioned.

The ruling Saenuri Party and President Park Geun-hye were at the forefront of the criticism.

“I’m afraid populist policies are being overused ahead of the general election,” Park told a press conference last month. “If municipal governments continue to undertake unaffordable projects, the burden will go directly to the central government.”

At a recent party meeting, Saenuri Party Chairman Kim Moo-sung said, “Seongnam is working on free welfare. We should bear in mind that their populist policies are the devil’s whispers.”

Lee struck back, saying he was merely fulfilling his election pledges.

“Keeping one’s pledges is not populism,” he said. “Reneging on pledges after garnering the people’s votes, like Park did, is populism.”

In her 2012 presidential campaign, Park pledged to expand subsidies to all people aged over 65 by providing them with 200,000 won a year. But amid rising concern about the proposed scheme’s feasibility, it was revised to offer differential payment to 70 percent of those eligible, based on how long they had belonged to the National Pension Service.

Lee said he believed his welfare programs were sustainable because they were based on an analysis of the city’s financial capacity for the remaining three years of his term.

He said there was a need for new policies for the young, who are becoming marginalized in society due to soaring unemployment. In 2015, government data showed the jobless rate of people aged 15-29 was 9.2 percent, compared to the national average of 3.6 percent.

“For the first time in history, the status of the young generation is more dismal than that of the older generation,” Lee said “When job creation has reached a limit we need to look at different solutions. And I don’t think it is wrong to invest 11.3 billion won, or 1.9 percent of the city’s yearly budget, on welfare.”

Lee added that the city was planning to provide nontransferable electronic cards instead of vouchers from the second quarter of the year to help prevent the illegal sale of welfare benefits.

Communication through social networks

Lee put his name on the list of potential presidential candidates, despite having only a one-digit approval rating in Gallup surveys conducted from April 2014. As he came to public attention with his strong welfare stance, his rating rose to 4 percent last August.

His forthright remarks on ongoing issues through social networks have differentiated him from other possible candidates, observers say.

Lee communicates with the public through Twitter and Facebook. When health authorities struggled with the Middle East Respiratory Syndrome (MERS) outbreak last year, Lee was a step ahead, setting up municipal emergency headquarters and providing related information and real-time updates through social networks, efforts that were highly praised.

“I believe talking directly to people can be more beneficial to them than beating around the bush,” he said. “Social networks have become a direct channel between the people and me. This is really important especially when the media often distorts politicians’ words.”

Meanwhile, the prosecution has reportedly opened an investigation into Seongnam for allegedly launching illegal election campaigns for Lee through social networks in preparation for the 2018 local elections. The city has urged the prosecution to drop the case, saying it unfairly targeted the mayor.

“To a ruler who delivers only her words unilaterally, a politician who advocates communication must look dumb,” Lee said. “It seems there is an attempt to tie my hands by taking away social networking.”