Disaster Relief Funds, Returned Through Donations After Distribution to All Citizens?… Ministry of Economy and Finance Remains Silent

Democratic Party "Voluntary Donations from High Earners to Alleviate Fiscal Burden"
Prime Minister Jeong Seyeon "Will Accept if System is Established in the National Assembly"
Ministry of Economy and Finance "No Official Position Announced Yet"

On the 20th, when the second supplementary budget bill for the COVID-19 emergency disaster relief fund payment was submitted to the plenary session, documents related to the supplementary budget bill were placed in the corridor in front of the National Assembly's bill office. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Kim Hyunjung] On the 22nd, as the Democratic Party of Korea announced that it would provide emergency disaster relief funds for the novel coronavirus infection (COVID-19) to all citizens and then accept voluntary donations, Prime Minister Chung Sye-kyun expressed the position that "if there is an agreement in the National Assembly, the government will accept it." However, the Ministry of Economy and Finance, the main ministry in charge, drew a line by saying, "There is no official position to express on this."

In the afternoon, Cho Jung-sik, the Policy Committee Chairman of the Democratic Party of Korea, held a press conference at the National Assembly regarding the emergency disaster relief funds and stated, "We will promote expanding the emergency disaster relief funds to all citizens under the principles of urgency and universality," adding, "We will also prepare measures to reduce the financial burden through voluntary donations from social leaders and high-income earners."

This means that the government’s original plan to selectively provide emergency disaster relief funds to the bottom 70% income group will be changed to first provide it to all citizens (100%), and then high-income earners can voluntarily donate to reduce the financial burden. For those who express the intention not to receive the support funds, the amount will be considered a donation and tax credit benefits will be given. A tax credit rate of 15% is being discussed. For example, if a household in the top 30% income bracket with four or more members treats the 1 million KRW emergency disaster relief fund as a donation before receiving it, they can deduct 150,000 KRW (15% of 1 million KRW) from their taxes.

However, it is difficult to predict exactly how many high-income earners will return the support funds in this way, and the supplementary budget bill submitted to the National Assembly on the 16th will also need to be rewritten. Assuming support funds are provided to all citizens, an increase of about 3 trillion KRW in the budget and the issuance of deficit bonds are expected, but it is currently impossible to estimate how much can be recovered through voluntary donations.

Prime Minister Chung Sye-kyun expressed a positive stance on this matter. In a statement, he said, "If a system that allows voluntary donations from high-income earners is established in the National Assembly, the government will accept it."

However, it is uncertain whether the Ministry of Economy and Finance is included in the government's scope of "accepting" and whether an agreement has been reached. At the time Cho Jung-sik was holding the press conference, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, was conducting a briefing related to the 5th Emergency Economic Meeting at the Seoul Government Complex. In response to reporters' questions about the possibility of revising the second supplementary budget bill, Deputy Prime Minister Hong repeatedly said, "We once again request the National Assembly to complete deliberations as soon as possible, even within April," emphasizing, "If the National Assembly approves it, the government will prepare perfectly in advance to enable immediate support without delay." This effectively indicates the intention to proceed with the original plan. He did not mention the plan to "provide 100% first and then recover through donations." Regarding this, a Ministry of Economy and Finance official said, "We currently have no official position to express on the emergency disaster relief fund payment plan announced by the ruling party."

Meanwhile, President Moon Jae-in emphasized the need for speedy agreement in the National Assembly during his opening remarks at the 5th Emergency Economic Meeting earlier that day, saying, "Please prepare to pass the second supplementary budget as quickly as possible and execute it in a timely manner."

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