Concern grows over possible depletion of state coffer
Concerns are growing over the possible depletion of state coffers as the ruling camp is rushing to submit a series of packages that require huge amounts of taxpayers' money. On Tuesday, Rep. Lee Nak-yon, chairman of the governing Democratic Party of Korea (DPK), vowed to provide a fourth round of disaster relief funds to help people cope with the COVID-19 pandemic. "The party will consult with the government on ways to secure sufficient extra budget to assist the people," he said during a speech at the National Assembly.
Lee's statement is in line with President Moon Jae-in who said during a meeting with senior aides at Cheong Wa Dae, Monday, that measures were needed to support people reeling from the pandemic. Lee went further, calling for an extension of allowances to juveniles, requiring an additional 6 trillion won ($5.4 billion) per year.
It is necessary to support people suffering from the state-imposed ban to cope with the unprecedented health crisis. Yet the idea of offering money to all people, including those unaffected by the pandemic, should be reconsidered because the effectiveness of relief funds is questionable and there are concerns about deteriorating fiscal soundness.
More than 20 trillion won is needed for the fourth relief fund and the government will have to issue state bonds to find the money. Any bond issuance should be minimized to prevent government debt from snowballing.
Lee's remarks triggered a backlash from the government. Deputy Prime Minister and Finance Minister Hong Nam-ki said, "The government cannot accept the idea of offering both universal and selective assistance at once." Hong renewed his opposition Wednesday, saying his statement Tuesday was "a restrained expression from the financial authorities." The party's move was taken as politically motivated ahead of the Seoul and Busan mayoral by-elections slated for April. Any attempt to woo voters with relief funds is equivalent to a "populist" policy, an irresponsible act that will lead to a huge burden on government coffers and the next generation.
The party is already seeking to introduce a "damage compensation bill" to help small businesses and the self-employed hit from the fallout of the pandemic. As the envisioned bill will require around 100 trillion won, the DPK should seriously ponder how to finance it alongside detailed and feasible ways of using the money.
As was done in the second and third rounds, the fourth round of funding should be first focused on those most affected with huge losses including daily none regular workers, freelancers and small business owners. Enough money should be offered so that they can recover quickly.
As the government is equipped with relevant data on the "selective" assistance via the previous round of relief, it would have no particular difficulties in implementing the payouts. Yet what matters more is for the government to map out more detailed and available measures so that the money can be offered to the needy in a proper manner.
Concerns are growing over the possible depletion of state coffers as the ruling camp is rushing to submit a series of packages that require huge amounts of taxpayers' money. On Tuesday, Rep. Lee Nak-yon, chairman of the governing Democratic Party of Korea (DPK), vowed to provide a fourth round of disaster relief funds to help people cope with the COVID-19 pandemic. "The party will consult with the government on ways to secure sufficient extra budget to assist the people," he said during a speech at the National Assembly.
Lee's statement is in line with President Moon Jae-in who said during a meeting with senior aides at Cheong Wa Dae, Monday, that measures were needed to support people reeling from the pandemic. Lee went further, calling for an extension of allowances to juveniles, requiring an additional 6 trillion won ($5.4 billion) per year.
It is necessary to support people suffering from the state-imposed ban to cope with the unprecedented health crisis. Yet the idea of offering money to all people, including those unaffected by the pandemic, should be reconsidered because the effectiveness of relief funds is questionable and there are concerns about deteriorating fiscal soundness.
More than 20 trillion won is needed for the fourth relief fund and the government will have to issue state bonds to find the money. Any bond issuance should be minimized to prevent government debt from snowballing.
Lee's remarks triggered a backlash from the government. Deputy Prime Minister and Finance Minister Hong Nam-ki said, "The government cannot accept the idea of offering both universal and selective assistance at once." Hong renewed his opposition Wednesday, saying his statement Tuesday was "a restrained expression from the financial authorities." The party's move was taken as politically motivated ahead of the Seoul and Busan mayoral by-elections slated for April. Any attempt to woo voters with relief funds is equivalent to a "populist" policy, an irresponsible act that will lead to a huge burden on government coffers and the next generation.
The party is already seeking to introduce a "damage compensation bill" to help small businesses and the self-employed hit from the fallout of the pandemic. As the envisioned bill will require around 100 trillion won, the DPK should seriously ponder how to finance it alongside detailed and feasible ways of using the money.
As was done in the second and third rounds, the fourth round of funding should be first focused on those most affected with huge losses including daily none regular workers, freelancers and small business owners. Enough money should be offered so that they can recover quickly.
As the government is equipped with relevant data on the "selective" assistance via the previous round of relief, it would have no particular difficulties in implementing the payouts. Yet what matters more is for the government to map out more detailed and available measures so that the money can be offered to the needy in a proper manner.
![[ANALYSIS] Tesla, BYD's price cuts unnerve LGES, Samsung, SK](https://img.koreatimes.co.kr/upload/thumbnailV2/b1cf8ba68d474cb69352bfe7ea9d14f0.jpg/dims/resize/178/optimize)
![[INTERVIEW] How ATEEZ achieved worldwide success](https://img.koreatimes.co.kr/upload/thumbnailV2/c7723b56dde94eb4b260950d368fe8fb.jpg/dims/resize/178/optimize)
