Second relief package should be handed out before Chuseok holidays
The extra budget of 7.8 trillion won ($6.57 billion) has been decided for a second relief package to help those suffering from the coronavirus pandemic. Unlike the blanket relief package distributed previously to all households in May, the second one is tailored for the small business owners and the self-employed impacted heavily in falling sales by COVID-19.
Reflecting to some extent how difficult the decision was ― in light of the government's fiscal soundness and controversy over the fairness of a selective relief grant ― President Moon Jae-in mentioned the "tremendous sense of responsibility" to come up with additional measures. The fourth extra budget pushes up the government debt ratio to 43.9 percent.
The second relief package targets the 3.77 million small business owners and the self-employed, allocating nearly half or 3.8 trillion won of the supplementary budget to that group. Out of that, 3.2 trillion won will be distributed to small business owners and the self-employed in payouts of up to 2 million won in cash.
The cafes and restaurants limited in their hours by the tightened social distancing measures will receive 1.5 million won irrespective of decline in sales; and businesses in 12 categories such as internet cafes and singing rooms closed under the distancing rules will receive 2 million won. Regular small businesses and self-employed whose annual sales stand at 400 million won or less a year will receive 1 million won if their sales have declined.
A total of 1.4 trillion won is designated for protecting the livelihoods of freelancers and workers in other special categories. The government has also thrown in extended childcare cash benefits as well as 20,000 won to all Koreans over 13 to help pay for September phone bills.
That said, the second relief package is a mixed bag of sorts that does not match its original intent. The small businesses and self-employed may feel that help is inadequate. Some people may be wondering whether it is wise to receive the 20,000 won for phone bills, as the second relief package will be financed by issuing more government bonds. We are all aware that government bonds will return to us as taxes. Moreover, people are cautiously voicing the opinion that the one-time phone bill subsidy should be channeled into support for small businesses.
There is also the issue of fairness. By limiting the pending cash relief based on annual sales of 400 million won or less for regular small businesses and self-employed recipients, those just above that line may feel unduly left out.
The tailored nature of the second relief package is unlikely to satisfy all. With Chuseok, one of the nation's largest holidays, coming up, the relief packages should arrive in time to address the recipients' needs.
The extra budget of 7.8 trillion won ($6.57 billion) has been decided for a second relief package to help those suffering from the coronavirus pandemic. Unlike the blanket relief package distributed previously to all households in May, the second one is tailored for the small business owners and the self-employed impacted heavily in falling sales by COVID-19.
Reflecting to some extent how difficult the decision was ― in light of the government's fiscal soundness and controversy over the fairness of a selective relief grant ― President Moon Jae-in mentioned the "tremendous sense of responsibility" to come up with additional measures. The fourth extra budget pushes up the government debt ratio to 43.9 percent.
The second relief package targets the 3.77 million small business owners and the self-employed, allocating nearly half or 3.8 trillion won of the supplementary budget to that group. Out of that, 3.2 trillion won will be distributed to small business owners and the self-employed in payouts of up to 2 million won in cash.
The cafes and restaurants limited in their hours by the tightened social distancing measures will receive 1.5 million won irrespective of decline in sales; and businesses in 12 categories such as internet cafes and singing rooms closed under the distancing rules will receive 2 million won. Regular small businesses and self-employed whose annual sales stand at 400 million won or less a year will receive 1 million won if their sales have declined.
A total of 1.4 trillion won is designated for protecting the livelihoods of freelancers and workers in other special categories. The government has also thrown in extended childcare cash benefits as well as 20,000 won to all Koreans over 13 to help pay for September phone bills.
That said, the second relief package is a mixed bag of sorts that does not match its original intent. The small businesses and self-employed may feel that help is inadequate. Some people may be wondering whether it is wise to receive the 20,000 won for phone bills, as the second relief package will be financed by issuing more government bonds. We are all aware that government bonds will return to us as taxes. Moreover, people are cautiously voicing the opinion that the one-time phone bill subsidy should be channeled into support for small businesses.
There is also the issue of fairness. By limiting the pending cash relief based on annual sales of 400 million won or less for regular small businesses and self-employed recipients, those just above that line may feel unduly left out.
The tailored nature of the second relief package is unlikely to satisfy all. With Chuseok, one of the nation's largest holidays, coming up, the relief packages should arrive in time to address the recipients' needs.
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