[Comprehensive] Selective vs. Universal... Disagreement Within Ruling Party Over Eligibility for 2nd Disaster Relief Fund Payment

Lee Nak-yeon "We Must Provide Strong Support for Those in Difficulty"
Lee Jae-myung "Differential Payments Only Cause National Division"
Funding and Policy Effectiveness Remain Challenges
Hong Nam-ki "If a Second Support Fund Is Given, 100% Government Bonds Must Be Issued"

On the 24th, Lee Nak-yeon, a member of the Democratic Party of Korea, argued in a post on his Facebook that the second emergency disaster relief fund should be selectively provided to vulnerable households. / Photo by Asia Economy DB

[Asia Economy Reporter Lim Juhyung] As the novel coronavirus disease (COVID-19) resurges, voices from the ruling party calling for the issuance of a second emergency disaster relief fund have emerged, sparking debate over the eligibility criteria. While some argue that the aid should be selectively provided to vulnerable groups, others counter that, as with the first round, it should be distributed to the entire population to ensure fairness.

However, with the uncertainty over how long the COVID-19 spread will continue and the difficulty in securing funds for new disaster relief, the government is taking a cautious stance.

Earlier, the Democratic Party of Korea had voiced the need to consider issuing a second disaster relief fund in preparation for the COVID-19 resurgence. On the 21st, Kim Tae-nyeon, the party's floor leader, stated at the Supreme Council meeting, "As COVID-19 rapidly spreads, the economy is expected to freeze again for about two months," adding, "We need to consider a second disaster relief fund."

Lee Nak-yeon, a lawmaker running for the Democratic Party leadership, also wrote on his Facebook on the same day, "Discussions on the second disaster relief fund have begun in the political sphere. I agree with the concerns and sincerity behind this," emphasizing, "A thorough review of the effects and challenges of the first relief fund should be conducted simultaneously."

However, opinions within the party are divided over the target recipients of the relief fund.

Gyeonggi Province Governor Jaemyung (center), Gyeonggi Provincial Superintendent of Education Jaejung Lee (right), and Chief of the Southern Gyeonggi Provincial Police Agency Haeyoung Choi held a joint briefing at the Gyeonggi Provincial Office in Suwon, Gyeonggi Province on the afternoon of the 18th, announcing measures to mandate mask-wearing for all residents. / Photo by Yonhap News

The first disaster relief fund, which began distribution in April, was provided to the entire population. However, some within the ruling party argue that, given the different circumstances now compared to the first round, the aid should be selectively given to households in need.

In a statement released on the 24th, Lee said, "During the first round in spring, there was discussion about the target recipients, but due to administrative preparations and public acceptance concerns, universal distribution was chosen," adding, "This time, I believe differential support that more robustly helps those in difficulty is appropriate."

Jin Sung-joon, chairman of the Democratic Party's Strategic Planning Committee, also said in an MBC radio interview that day, "Since a more serious situation could arise, we need to reserve fiscal capacity," suggesting, "How about limiting support to the most urgent areas?"

On the other hand, there was a rebuttal that differential distribution would only cause conflict among citizens and that, as with the first relief fund, it should be distributed uniformly. Lee Jae-myung, governor of Gyeonggi Province, wrote on his Facebook that day, "Proposals to provide disaster relief funds only to some or to give twice the amount to the lower 50% of the population violate the constitutional principle of equality," emphasizing, "They cause division and conflict among the people and align with the conservative opposition's selective welfare policy."

He further pointed out, "There is no rational basis to distinguish between the lower 50% and the 50.1% with little difference in income," adding, "It is unacceptable to exclude those who have paid or should pay more taxes from economic policy implementation, and if this reflects an ideological hostility toward the wealthy, it is even more unacceptable."

Deputy Prime Minister for Economy Hong Nam-ki is responding to questions at the plenary session of the National Assembly's Special Committee on Budget and Accounts on the 24th. / Photo by Yonhap News

As opinions diverge within the ruling party over the scope of recipients for the second disaster relief fund, the government is showing a cautious stance regarding the distribution of the aid, especially citing a lack of capacity to secure funds.

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, appeared at the National Assembly Budget and Accounts Special Committee plenary session that day and said, "During the first relief fund distribution, the government restructured the existing budget to secure over 10 trillion won," adding, "If the second relief fund is provided at a similar level, I think it will inevitably require 100% issuance of government bonds."

He explained, "While preparing three supplementary budgets, we restructured projects that were difficult to execute," adding, "Now, with little time and budget left this year, there are practically no projects left to restructure."

Regarding the question about proposals to secure funds by partially cutting public servant wages, he responded, "To secure funds through public servant salaries, cuts would have to be made to lower-level employees who make up 80%. There are constraints," adding, "We have to consider the 1 million public servants, and with only four months left in 2020, I don't think much funding will come from this."

There were also criticisms that the policy effect of the first disaster relief fund was insufficient compared to its cost. Deputy Prime Minister Hong said, "Since about 14 trillion won was provided during the first relief fund, there was a corresponding policy effect," but added, "However, we internally assess that the actual policy effect leading to consumption was about one-third."

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