[Desk Column] Basic Income System, Is It the Right Answer or the Wrong One?

[Image source=Yonhap News]

[Asia Economy Lee Cho-hee, Head of Finance Department] In the 2012 19th general election, most people predicted the then-opposition Democratic United Party would have the upper hand. The MB (former President Lee Myung-bak) judgment theory, promoted by progressive commentators enjoying idol-level popularity, stirred up momentum, and no one expected the ruling party (Saenuri Party) to win amid the lame-duck period at the end of the administration. With the Democratic United Party's overwhelming dominance, it was widely optimistic that they would secure the largest party status in the National Assembly and easily achieve a majority of seats.

The public's prediction was dramatically overturned. The opposition, combining the Democratic Party and the Unified Progressive Party, won only 140 seats, while the Saenuri Party, whose defeat seemed certain, secured 152 seats, surpassing the majority. This is remembered as the most dramatic election since the civilian government era. The election results eventually influenced the presidential election held in December that year, and 'Election Queen' Park Geun-hye became president.

The background of this great turnaround included a 'left-click' rush so intense that it cast doubt on the Saenuri Party's identity(?). Ahead of the general election, Park Geun-hye, the emergency committee chairperson, made a bold move by recruiting Kim Jong-in, a symbol of economic democratization. Chairman Kim Jong-in changed the party's color, a symbol of the conservative party, to red and began advocating economic democratization as if competing with the opposition. When the Democratic Party proposed the '3+3' welfare pledge, the Saenuri Party responded with 'Ask and double it,' adding two more to make it a '5+5' welfare pledge. Progressive strategists, unfamiliar with such tactics, failed to find a suitable solution and ultimately suffered a reversal defeat in the election.

Eight years later, the conservative left-click wind is blowing again in the political arena. Kim Jong-in, who returned to save the Future United Party after its election defeat, has now taken center stage with 'basic income,' positioning himself at the heart of the left-click. The agenda of basic income, advocated by potential ruling party presidential candidates due to the COVID-19 pandemic, seems to have shifted to the conservative opposition under Kim's leadership. It could be said that Kim Jong-in's style of outspending the opponent has worked.

The opposition suffered a crushing defeat in the 21st general election. They are trapped in a bleak reality, struggling with a 'lack of candidates' in the next presidential candidate approval ratings.

It is difficult to say immediately whether the basic income system is good or bad. However, the sincerity of the basic income theory suddenly brought up by Kim, the opposition leader cornered in the worst situation, must be examined.

The basic income system is fundamentally different from the COVID-19 emergency disaster relief funds. It is not a one-time event but paid monthly. Even if 300,000 KRW per person per month is paid to all citizens, it would require a national budget of 180 trillion KRW annually. This could shake the fundamental framework of national fiscal soundness.

Let's turn the clock back to 2015. Yoo Seung-min, floor leader of the Saenuri Party, stated in a National Assembly floor leader speech, "Welfare without tax increases is proving to be a fiction," and "We can no longer keep the pledges of President Park Geun-hye and the Saenuri Party." Now, everyone knows that basic income cannot be implemented without tax increases.

Welfare can no longer be simply defined as left-wing populism. Influential politicians from both ruling and opposition parties are eagerly pursuing welfare through alliances. Basic income is an issue requiring much debate and time. Creating a forum for public discussion before the 2022 presidential election to gain public understanding may be a welcome development. However, the current basic income debate seems nothing more than a public opinion rally by politicians aiming to preempt the issue.

The direction of public opinion has not yet been decided. It is unknown whether basic income is the right or wrong answer. Depending on how it is handled, the basic income system could become a ticket to the presidential election. It must be understood that the exchange between welfare and taxes is never easy, and the cost is daunting.

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