Discussion on the '4th Disaster Relief Fund' Emerges... Could It Become a Variable in the By-Election?

68% Support Nationwide Payment of 4th Disaster Relief Fund, 30% Oppose
Hong Nam-ki: "Discussion on 4th Relief Fund Premature... Selective Support Preferable"
Experts: "Impact Likely Less Than 1st Disaster Relief Fund"

Lee Nak-yeon, leader of the Democratic Party of Korea, is reviewing meeting materials at the Supreme Council meeting held at the National Assembly in Yeouido, Seoul, on the morning of the 11th.
[Image source=Yonhap News]

[Asia Economy Reporter Heo Midam] As the third round of disaster relief funds for the novel coronavirus infection (COVID-19) begins to be distributed today (the 11th), discussions surrounding the fourth round of disaster relief funds are already underway in the political sphere. Especially with the Seoul and Busan mayoral by-elections scheduled for April just three months away, political conflicts over the distribution method are intensifying.

Following Gyeonggi Province Governor Lee Jae-myung, key ruling party figures including Lee Nak-yeon, leader of the Democratic Party of Korea, have advocated for universal distribution of disaster relief funds, while the opposition strongly criticized this as a 'populist policy' and emphasized selective distribution. Experts predict that the impact of the fourth disaster relief fund on the by-elections will be minimal.

Ruling party figures have continuously raised the necessity of providing disaster relief funds to all citizens. In a media interview on the 4th, Lee Nak-yeon stated, "When COVID-19 is under control and the economy needs stimulation, universal (disaster relief fund) support plans can also be considered," fueling the discussion.

Subsequently, on the 6th, Democratic Party spokesperson Heo Young issued a statement saying, "The discussion on universal disaster relief fund distribution goes beyond comforting citizens who have silently endured hardships since the outbreak of COVID-19; it is about survival," adding, "Selective and universal support inevitably must be implemented in parallel."

Governor Lee also posted on his Facebook on the 8th, "The first round was universal support, the second and third rounds were selective support, so now universal support for all citizens can be considered." Notably, on the 4th, he sent letters to all 300 members of the National Assembly, appealing, "Like the first disaster relief fund, bold fiscal policies should be implemented to stimulate consumption and revitalize the local economy."

Public opinion on universal distribution of disaster relief funds appears positive. According to a survey conducted by polling firm 'Realmeter' on the 6th targeting 500 people nationwide aged 18 and over, 68.1% responded that they agree with universal distribution of the fourth disaster relief fund. Those who disagreed accounted for 30.0%, and 1.9% were unsure. The survey's margin of error is ±4.4 percentage points at a 95% confidence level. Detailed information can be found on the Central Election Poll Deliberation Commission website.

Kim Jong-in, Emergency Response Committee Chairman of the People Power Party, Joo Ho-young, Floor Leader, and others are attending the Emergency Response Committee meeting held at the National Assembly on the 11th.
[Image source=Yonhap News]

On the other hand, the opposition strongly criticized the discussion of universal distribution of the fourth disaster relief fund just three months before the by-elections, calling it a 'populist policy' aimed at winning public favor. They are closely monitoring the potential impact of universal disaster relief funds on voter sentiment, as it could influence election outcomes.

Previously, the government and ruling party decided to provide disaster relief funds (1 million KRW for a family of four) to all citizens ahead of the April 15 general election last year, which resulted in a landslide victory.

The problem is that providing universal disaster relief funds requires nearly 10 trillion KRW in resources. When the first disaster relief fund was distributed, the government prepared a supplementary budget of 14.3 trillion KRW. Since contingency funds were already used for the third round of disaster relief funds, issuing government bonds would be inevitable if universal support is realized. In contrast, the scale of selective support funds is around 4 trillion KRW, significantly reducing the fiscal burden.

Therefore, the opposition places more weight on 'selective distribution' rather than 'universal distribution.' During the first disaster relief fund, the spread and damage of COVID-19 were not severe, and there was justification for universal support to stimulate consumption. However, in the current serious COVID-19 situation, support should be concentrated on small business owners and others who have been affected.

Joo Ho-young, floor leader of the opposition, criticized in a press meeting after an online policy workshop on the 5th, saying, "It is absurd whether this is aimed at the April elections or if there is a proper funding plan." Policy Committee Chair Lee Jong-bae also condemned, "Pulling out the universal disaster relief fund card hastily about 90 days before the Seoul and Busan mayoral elections is a shallow attempt to buy fading public sentiment with money and a distorted governance that even abuses the national treasury as an election tool."

Jeju Province Governor Won Hee-ryong also pointed out on his Facebook on the 10th, "Governor Lee's claim for universal support not only harms fairness but also reduces policy effectiveness," adding, "Support funds that should go to severely affected groups must not be spent as supplementary income for affluent groups."

Hong Nam-ki, Deputy Prime Minister for Economy and Minister of Economy and Finance, is presiding over the 2nd Innovation Growth BIG3 Promotion Meeting held at the Government Seoul Office Building on the 8th.
[Photo by Yonhap News]

The financial authorities also appear skeptical about universal distribution. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, described the discussion on the fourth disaster relief fund as 'premature' but said that if support is necessary, it should be focused on affected groups.

Appearing on KBS's Sunday Diagnosis program 'The Era of Disaster, Asking the Path of the Korean Economy' the previous day, Deputy Prime Minister Hong responded to questions about the fourth disaster relief fund by saying, "The discussion on the fourth support fund is premature in terms of timing," and added, "It is a matter to be judged comprehensively considering how the quarantine situation will develop and the damage and economic conditions."

He further warned, "Government funds are not an inexhaustible source, so it is desirable to selectively and intensively support affected groups," adding, "If disaster relief funds are distributed again, all must be financed by deficit bonds, which could affect the country's credit rating and burden future generations."

Experts analyzed that if the fourth disaster relief fund is distributed universally, its impact on the by-elections would be somewhat minimal.

Political commentator Lee Jong-hoon said, "The ripple effect will be less than when disaster relief funds were first distributed because it has the image of a 're-run,'" adding, "As disaster relief funds are repeatedly distributed, national debt is rapidly increasing. Public concern about this is growing, so disaster relief funds will not be unconditionally welcomed." He further noted, "Since the Democratic Party repeatedly proposes such plans, the public may see this as an 'election strategy.'"

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