President Moon Directly Calls for Loss Compensation System... Discussions Likely to Accelerate

[Image source=Yonhap News]

[Sejong=Asia Economy Reporter Kim Hyunjung] As President Moon Jae-in directly ordered the ruling party and government to review legislation on the loss compensation system for damages caused by the novel coronavirus infection (COVID-19), related discussions are expected to accelerate. In particular, he mentioned "within the fiscal capacity" and "a certain range," presenting a blueprint for inclusive recovery and leap forward.

On the afternoon of the 25th, during a video briefing at the Blue House with the Ministry of Health and Welfare, the Ministry of Food and Drug Safety, and the Korea Disease Control and Prevention Agency on their New Year tasks, President Moon said, "I hope the ruling party and government, along with related ministries such as the Ministry of SMEs and Startups, will review ways to institutionalize loss compensation within a certain range that the fiscal capacity can bear for small business owners and self-employed individuals whose businesses are restricted or prohibited due to government quarantine measures." The loss compensation system, which directly compensates small business owners and self-employed individuals for COVID-19 damages, has been raised mainly by the ruling party, but this is the first time President Moon has mentioned it directly.

President Moon stated, "As COVID-19 prolongs, the difficulties of the people are increasing. Although the economy is recovering rapidly, job recovery is slow, and the difficulties of small business owners and self-employed individuals are intensifying," and urged, "Let us join forces for inclusive recovery and inclusive leap forward."

Previously, the ruling party and government showed differences over the target, scale, and timing during the legislative process for the loss compensation system. The Ministry of Economy and Finance, emphasizing the need to consider fiscal soundness and other conditions, was strongly criticized by the ruling party and Prime Minister Chung Sye-kyun. It is known that the government plans to finalize and convey a position excluding equal-rate compensation based on sales damage.

The compensation plan based on sales is the method preferred by the ruling party, but since the required funds would balloon like a snowball, it would inevitably be a significant burden for the government. Rather than a bill specifying detailed payment criteria such as equal-rate compensation based on sales, which is difficult to reach consensus on between the ruling party and government (such as the bill by Min Byung-duk of the Democratic Party), more weight is being placed on establishing minimal support grounds similar to ▲rent and tax support (Kang Hoon-sik’s proposal) ▲establishment of the Small Business Loss Compensation Committee (Lee Dong-joo’s proposal) ▲partial rent support in case of sales decline (Jeon Yong-gi’s proposal), with detailed plans left to enforcement ordinances allowing government discretion for adjustments.

The ruling party and government, which have repeatedly disagreed on the legislation of the loss compensation system, see ‘speed’ for timely payment as the key. President Moon’s direct mention of this during the Ministry of Health and Welfare’s briefing, rather than the relevant ministries, is interpreted as aiming for ‘quick agreement’ and ‘implementation.’

Earlier, Hong Ik-pyo, chairman of the Democratic Party’s Policy Committee, also emphasized on a radio program, "The most important thing is speed," adding, "People on the ground are complaining about difficulties, so we should not drag out the bill discussions."

Meanwhile, the ruling party and government plan to merge the final draft coordinated within the party and the opinions submitted by the government to pass it through the February extraordinary session of the National Assembly at the earliest, aiming for actual payment by early April at the latest.

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