Democratic Party's New Leadership Faces Test with 4th Supplementary Budget... "Broad Discussions on Employment and Self-Employment Measures"

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The new leadership of the Democratic Party of Korea, set to be inaugurated next week, will immediately begin discussions on the 4th supplementary budget (supplementary budget). They are expected to review the overall framework, including not only the second round of disaster relief funds but also support for employment retention and self-employed individuals facing the risk of business closure.

On the 28th, a Democratic Party official said, "Once the new leadership is elected, discussions on the 4th supplementary budget will intensify," adding, "We need to consult with relevant government ministries on whether to provide the second round of disaster relief funds. If the 4th supplementary budget is to be implemented, a key issue will be whether to focus solely on the disaster relief funds or to consider the overall damage caused by the novel coronavirus infection (COVID-19)."

He continued, "In some ways, issues like the risk of business closures and employment retention subsidies may be more urgent than disaster relief funds. We need to assess the scale of damage caused by COVID-19 and determine how much the government budget can support."

Since the next year's main budget was effectively decided through party-government consultations on the 26th, discussions on the 4th supplementary budget can begin immediately. However, the temporary closure of the National Assembly due to a COVID-19 case among reporters covering the Assembly poses a variable.

Lee Nak-yeon, a leading candidate for the next Democratic Party leader, stated at an MBC joint debate the previous day, "If I become party leader, I will immediately bring the issue of disaster relief funds to the forefront of party-government consultations. The party and government will have no choice but to intensify discussions early next week." On the same day, he posted on Facebook, "The pain of socially vulnerable groups such as workers, self-employed individuals, and small business owners is great. We are preparing support measures."

The government remains cautious about the 4th supplementary budget, but President Moon Jae-in mentioned at the Cabinet meeting on the 25th, "Although financial support has been provided through three supplementary budgets and large-scale financial assistance, please urgently review whether there are any shortcomings."

Concerns about mass layoffs due to the depletion of employment retention subsidies have been raised. Although the support period for special employment support sectors such as aviation and tourism, whose employment retention subsidies expire at the end of next month, will be extended by two months, support for general sectors will no longer be available.

Employment and Labor Minister Lee Jae-gap said at the National Assembly Environment and Labor Committee meeting on the 21st, "We are conducting field surveys on workplaces approaching the end of the support period and will consider support measures based on this." The government initially allocated 35.1 billion won for employment retention subsidies but expanded the budget to 2.1632 trillion won through supplementary budgets and others; however, this is still insufficient.

The pain of self-employed individuals is also increasing. The Korea Federation of Small and Medium Business Associations urged on the 25th through a statement, "All possible extraordinary measures must be mobilized again to extinguish the urgent fire, including nationwide disaster relief funds that have shown meaningful effects for small business owners so far, up to 1.4 million won in business stabilization funds provided in Seoul and Busan, and rapid loans for low-credit small business owners conducted by the Small Enterprise and Market Service."

Regarding the second round of disaster relief funds, not only the Democratic Party but also opposition parties emphasize its necessity. The debate is over whether to provide it nationwide as in the first round or selectively. Lee Nak-yeon leans toward selective distribution and emphasized at the debate the previous day, "It is just and consistent with the welfare state ideology to provide more support to those who have suffered greater hardship due to the disaster."

On the other hand, former lawmaker Kim Boo-kyum, competing for the party leadership, argued, "There is no administrative statistics prepared to divide income levels at 50% or 70%," and stressed the urgency of providing a uniform payment. Lawmaker Park Joo-min also countered concerns about the fiscal burden of uniform payments, saying, "The standard that the national debt ratio must be kept at a certain level is becoming meaningless worldwide."

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