Sinsedon "Government's 50 Trillion COVID Economic Measures Are Hollow... Direct Compensation Needed for Sales Damage"

Roundtable on Japanese Government's Export Regulations. Professor Shin Se-don, Sookmyung Women's University. / Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Lee Ji-eun] Shin Se-don, co-chairman of the Future United Party's joint election committee, criticized the government's 50 trillion won scale economic measures related to the novel coronavirus infection (COVID-19) announced on the 19th as 'fictitious' and emphasized the need to adopt a plan to directly support the sales decline of small business owners.

On the 20th, at the National Assembly Press Hall, Chairman Shin said, "The government's livelihood financial stability package was set at 50 trillion won + α, but that number (50 trillion won) is fictitious."

He explained, "Among the 50 trillion won package, the support plan to provide 12 trillion won liquidity to small business owners at 1.5% interest rate is just about lowering the interest rate a little," adding, "If it is 1 percentage point lower than before, the actual effect is about 1% of 12 trillion won, which is 1.2 trillion won." Regarding the 8.5 trillion won guarantee plan, including 5.5 trillion won of special guarantees and 3 trillion won of rapid guarantees, he pointed out that "guarantees are factors of wealth that are not even recorded in the books from an accounting perspective," and thus are not very helpful.

He also pointed out that the core bond stabilization fund and securities stabilization fund lack substance because key details about who will underwrite them have not been decided.

Chairman Shin emphasized the need for direct support for business damages. He explained, "The Future United Party's support method is to directly help compensate for actual damages such as business damage and sales decline," and added, "For example, in the wholesale and retail sectors, depending on the damage level of 30-50% of monthly sales, part of the sales will be compensated, with half directly supported by the government and the other half repaid interest-free."

He also proposed issuing COVID-19 bonds to help small business owners. He said, "Assuming that 30-40% of the approximately 10 to 12 million small business owners and self-employed have suffered sales shocks, if benefits of about 6 to 10 million won per person are arranged, the budget would be about 40 trillion won," and suggested, "20 trillion won can be covered by government finances, and the remaining 20 trillion won can be raised by issuing COVID-19 bonds."

Chairman Shin stated, "Nearly 2,000 trillion won of idle funds in financial institutions are unable to find places to invest at low interest rates, so by issuing COVID-19 national bonds, about 20 trillion won of that can be drawn to support small business owners," and added, "I hope the government will actively utilize our know-how through close consultations with the opposition party while preparing future COVID-19 measures."

This content was produced with the assistance of AI translation services.