Government to Submit to National Assembly a Loss Compensation Plan Excluding Sales-Linked Compensation

Massive Funding Required if Sales-Based Industry Compensation is Legislated
Efforts to Adjust Ruling Party Proposal Without Separate Bill Submission
Targeting Approval as Early as February, Actual Payments to Begin in March

[Image source=Yonhap News]

[Sejong=Asia Economy Reporters Kim Hyunjung, Jang Sehee] The government is reportedly settling on excluding equal compensation based on sales loss amounts in the ongoing political discussions regarding the self-employed loss compensation system. Although some members of the Democratic Party of Korea have expressed opinions that compensation should be based on sales through related legislation, estimates suggesting up to 25 trillion won in monthly fiscal support have led to considerations of fiscal soundness. The government is expected to convey its position by submitting opinions during the National Assembly’s deliberation process rather than submitting a separate legislative proposal.

A senior government official explained on the 25th, "Since there are significant differences in sales scale across self-employed industries, it is considered inappropriate to apply equal compensation by simply cutting the numbers," adding, "We plan to review the average costs of sales and losses by industry further and submit our opinions." The official continued, "The Ministry of Economy and Finance also considered submitting a separate government bill for the loss compensation system to be merged with the lawmakers’ bill, but decided to coordinate with the ruling party through opinion submissions."

While a sales-based compensation plan is the ruling party’s preferred method, the funding requirements would balloon like a snowball, making it a considerable burden for the government. Rather than a bill that specifies detailed payment criteria such as equal compensation based on sales?which has been difficult to reconcile between the ruling party and the government (e.g., the bill proposed by Democratic Party lawmaker Min Byungdeok)?there is growing support for establishing minimal support grounds in forms similar to ▲rent and tax support (proposal by Kang Hunsik) ▲establishment of the Small Business Loss Compensation Committee (proposal by Lee Dongju) ▲partial rent support in case of sales decline (proposal by Jeon Yonggi), with detailed plans delegated to enforcement ordinances allowing government discretion for adjustments.

The ruling party and government, which have repeatedly disagreed over the legislation of the loss compensation system, view ‘speed’ as crucial for timely payments. The government’s decision to submit review opinions instead of a bill is interpreted as an effort to avoid expanding the debate.

The ruling party is also moving toward consolidating its stance as party policy. Hong Ikpyo, the Policy Committee Chair of the Democratic Party of Korea, said on a radio program that day, "Delegating specific matters to enforcement ordinances seems necessary for efficient implementation," emphasizing, "The most important thing is speed." He explained, "People on the ground are expressing difficulties, and I believe we should not drag out the bill discussions. We are reviewing legislative issues while considering blind spots and fairness as much as possible."

The ruling party and government plan to merge the final proposal coordinated within the party and the opinions received from the government, aiming to pass it at the February extraordinary session of the National Assembly at the earliest and to begin actual payments by early April at the latest.

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