[3rd Supplementary Budget] 8.9 Trillion Won Invested Solely in Employment Stability... Discount Coupons Distributed and Corporate Liquidity Supported

3rd Supplementary Budget Scale 35.3 Trillion Won 'Largest Ever'
If Passed by National Assembly, 75% to Be Executed Within 3 Months 'Speed'

[Sejong=Asia Economy reporters Kim Hyun-jung and Kim Bo-kyung] The supplementary budget (supplementary budget) of 35.3 trillion won, organized to respond to the novel coronavirus infection (COVID-19) crisis, is mainly intended to be used for employment and economic stimulus. In particular, 8.9 trillion won will be poured solely into strengthening the employment safety net, such as employment retention, direct jobs, and support for the unemployed, with a focus on ensuring that the chain of economic activities is not broken.

On the 3rd, the government held an extraordinary Cabinet meeting at the Government Seoul Office, presided over by Prime Minister Chung Sye-kyun, to finalize the third supplementary budget plan with these contents and will submit it to the National Assembly on the 4th. The government plans to expedite the execution of 75% of the supplementary budget within three months once the supplementary budget bill is passed by the National Assembly.

◆ Focus on responding to COVID-19-induced employment crisis = Judging from the scale of the budget allocated by project, the government's main focus in this supplementary budget is 'job preservation.' First, 3.6 trillion won will be spent to create more than 550,000 emergency jobs, including non-face-to-face and digital jobs, youth digital jobs, and special hiring subsidies. For unemployment benefits for the unemployed, 3.4 trillion won is allocated; 1 trillion won for expanding employment retention subsidies and new support for wage reductions at workplaces; and 800 billion won for livelihood stabilization support for workers severely affected by COVID-19, such as special employment workers and self-employed. Including the 100 billion won budget for expanding the Tomorrow Learning Card for employment training, a total of 8.9 trillion won will be spent to strengthen the employment safety net.

Looking at newly created jobs, the Ministry of Employment and Labor, the main ministry in charge, will handle 154,000 jobs. Specifically, public recruitment is divided into two areas: industrial safety and social economy. It will hire 2,250 people (30.2 billion won) to investigate and input the safety and health status of 300,000 manufacturing workplaces. It will invest 11.2 billion won to hire 1,700 people to database regional social economy-related information such as social enterprises and cooperatives. Additionally, 395 employment center counseling staff (5.1 billion won) will be newly hired due to the recent surge in workload.

The private sector focuses on supporting wages for small and medium-sized enterprises (SMEs) hiring youth. The 'Youth Digital Job Project' is newly established to hire 50,000 young people in IT-utilizable positions at SMEs and mid-sized companies, with a budget of 467.8 billion won. A project providing work experience opportunities to 50,000 youths is allocated 235.2 billion won. For SMEs and mid-sized companies that newly hire with a labor contract of six months or more, a hiring incentive of 800,000 to 1 million won per month will be paid, requiring 296.7 billion won (for 50,000 people).

◆ 16.3 trillion won for reviving companies and consumption = The government allocated 5 trillion won for financial support for crisis-hit companies and small business owners. This will be used to support the '135 trillion won + α financial support package (including guarantees and loans)' announced on the 22nd of last month to overcome damage to small businesses, companies, and the employment crisis. A fund of 30.7 trillion won will be created to support liquidity for key industries such as aviation, shipping, and refining, and about 3.1 trillion won is budgeted for establishing special purpose vehicles (SPVs) for corporate bond and commercial paper purchases, corporate bond guarantees, refinancing issuance, and other emergency liquidity provisions for companies.

Along with the 5.1 trillion won Korean New Deal project announced through the second half economic policy direction on the 1st, 3.7 trillion won is allocated for revitalizing domestic demand, exports, and regional economies, and 2.5 trillion won for fostering the K-quarantine industry and upgrading disaster response systems. In particular, for domestic demand, discount coupons worth 168.4 billion won will be provided in eight major sectors including agricultural and marine products, lodging, tourism, culture, and dining, and 276 billion won will be spent to increase the issuance of Onnuri gift certificates to 50 trillion won. The budget for high-efficiency home appliance rebates has also been increased from 150 billion won to 450 billion won, and 75.9 billion won will support a large-scale art New Deal project to create and install murals and sculptures in public facilities nationwide.

Two billion won will be spent on subsidies to encourage companies that have moved overseas to return domestically, and 3 billion won on support for attracting overseas companies or research and development (R&D) centers to Korea. To revitalize the regional economy, 9 trillion won worth of local love gift certificates will be issued, and 317.7 billion won is allocated to apply a 10% discount rate to the unissued portion (5%) of the main budget. 552.5 billion won is allocated for safety reinforcement of aging tunnels, railroads, and other SOC, and 1.1 trillion won is budgeted for local bond underwriting to support strained local finances. Additionally, about 380 billion won will be provided for expanding trade finance to recover exports and for non-face-to-face export and logistics costs. 117.2 billion won will be spent on financial support (guarantees) for SMEs and small business owners, as well as for closure and startup costs and marketing expenses. 19.4 billion won will be directly supported to apply smart technology to production or distribution facilities, and separate special guarantees will also be provided.

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