Finance Ministry launches task force to scrutinize welfare policy proposals


Political parties were in unison Tuesday in assailing the government a day after it said it would examine the feasibility of “populist welfare pledges” made by politicians ahead of major elections this year.

Kim Jong-in, a senior member of the ruling Saenuri Party’s leadership council, called the government’s move a blatant attempt to constrain a political party from making election pledges.

“It is unprecedented that the government picks on political parties over their election pledges,” he said during a party meeting.

He said the Finance Ministry, which on Monday set up a task force to study parties’ election pledges, didn’t said a word about President Lee Myung-bak’s “747 pledge,” which he said was a pure absurdity.

Lee, during his presidential campaign in 2008, said that if elected, he would develop the local economy to achieve three goals during the five-year term: 7 percent annual growth, $40,000 a year per-capita income and becoming the world’s seventh-largest economy.

Last year, Korea’s economy grew 3.6 percent and its per-capita income stood at slightly over $20,000. It was the 15th largest economy in the world.

On Monday, the Finance Ministry launched a task force to monitor and study the feasibility of welfare proposals floated by major political parties amid worries that some of them, if realized, would seriously hurt the country’s fiscal sustainability.

It said that it would cost up to 340 trillion won ($303.3 billion) over the next five years to carry out all the welfare-related proposals put out by major political parties so far.

“From the perspective of fiscal authorities, it is challenging to accept the pledges unveiled by the political circles,” the ministry said.

Rep. Lim Hae-kyu, a member of the party’s committee formulating election pledges, joined in, saying that a political party should have the freedom to come up with its policy promises.

“Election pledges show a political party’s policy direction and its determination. The process of drawing them up is different from budgeting,” he pointed out.

On the opposition side, Lee Yong-sub, chief policymaker of the main opposition Democratic United Party, said that the flurry of welfare pledges being churned out by politicians today is nothing but efforts to fix the current administration’s failure to address the livelihood of the people.

“Why in the first place are politicians making such welfare pledges? It is because the current administration drove the majority of people to greater economic difficulty with its ‘business-friendly’ policies,” he said.

Yet, the government looks determined to guard against populist policies.

During a Cabinet meeting Tuesday, Prime Minister Kim Hwang-sik urged his lieutenants to response firmly to any political move that contradicts market economy principles or Constitutional values.

“We, the government, should stand firm amid this political confusion,” Kim said.

President Lee has earlier directed the Cabinet to stay vigilant of populism in the run-up to the parliamentary and presidential elections this year.

Welfare has become a key election issue as Koreans grapple with an ever-widening gap between the rich and poor and a middle-class squeeze.

To appeal to voters, the ruling Saenuri Party is considering campaign platforms which may include raising the wages of conscripts to 400,000 won a month from below 100,000 won at present, providing free child care to families with children under the age of 5, and free high school education.

The main opposition Democratic United Party’s promises include free school meals for all elementary and middle school students, a drastic expansion in national health insurance coverage, and slashing college tuitions by half.

By Lee Sun-young (milaya@heraldcorp.com)