Lee Jae-myung, the ruling Democratic Party of Korea’s presidential candidate, is pushing for COVID-19 relief payments to everyone.
When he was Gyeonggi governor, he defied the decision by the government and the party to restrict Chuseok holiday coronavirus relief to the bottom 88 percent income bracket and went through his plan to offer the assistance to all of the residents in the province by tapping the provincial budget. He expended more than 600 billion won ($510 million) to give 250,000 won in aid to each Gyeonggi resident in the top 12 percent bracket.
He is bold about using state coffers for cash welfare aid.
He already made an election pledge to spend tax revenues on giving basic incomes of 1 million won to everyone and 2 million won particularly to every young person each year. This pledge would require about 50 trillion won a year.
Lee raised an issue of COVID-19 relief just four days after stepping down as Gyeonggi governor on Oct. 25 to focus on his presidential campaign.
He said late last month that COVID relief payments should be 1 million won or more per capita a year, adding that about 500,000 won has been dispended so far.
He said that the party should secure a related budget during a regular parliamentary session this month and an extra budget quickly if need be.
His remarks invite suspicion that he may be trying to curry favor with voters with a cash handout program about four months ahead of the presidential election.
The party has a reputation for trying to use pandemic relief to give itself an advantage in elections. Most people believe the country’s first COVID-19 relief payment to every household propelled its landslide in the 2020 general election.
It made similar payments ahead of the April 7 by-elections for Seoul and Busan mayors too. By force of its majority in the National Assembly, the party passed the 15 trillion won extra budget for the fourth relief payment on the day official campaigning started.
Starting this month, the nation eased its COVID-19 curbs, backed by the share of its fully vaccinated population topping 75 percent. It is questionable if a large relief payment to the whole nation is necessary in a situation where everyday life is returning to normal.
Relief payments to the entire nation requires a huge budget. Even after subtracting the payments given so far, 25 trillion won will still be needed.
If the government can find the money to do so, it would be wise to concentrate relief on poor self-employed businesses hit hardest by the pandemic.
Lee says he will push the party to squeeze a COVID relief budget from the government’s budget for next year during the parliamentary session, but it appears difficult to raise all of the required funds without increasing the budget through the issue of government bonds.
But now is not the time to increase the national debt. The current administration has piled up debt through an array of cash welfare programs including pandemic aid. The national debt is expected to exceed 1,000 trillion won next year for the first time ever. The government budget bill for next year amounts to 604 trillion won.
With inflation concerns mounting, central banks in major economies are moving to pull back liquidity that was increased to respond to the economic impact of the COVID-19 pandemic. If Korea goes in the opposite direction, it will likely suffer.
Lee’s push for cash payments ahead of the presidential election shows the ultimate populism. Lee may be able to ingratiate himself with voters and at the same time dilute suspicions about himself over the Daejang-dong development scandal, both by using the government coffers.
DP floor leader Yoon Ho-jung promised to realize the presidential candidate’s election pledges through legislation and budget. He defined a pandemic relief to the whole nation as an urgent issue for the party to tackle.
To them, the government’s budget seems to be a means to get votes.
By Korea Herald (firstname.lastname@example.org