Regarding the Call for 'Disaster Relief Funds'... Jeong Sye-gyun Agrees "National Debt Must Increase"

Attendance of Deputy Minister of Economy and Deputy Minister of SMEs at 'Thursday Dialogue'... Discussion on Loss Compensation Plan

Prime Minister Chung Sye-kyun is speaking at the 34th Thursday Dialogue held on January 28, 2021, at the Prime Minister's Official Residence in Samcheong-dong, Seoul, on the topic of "Compensation for Business Losses Due to COVID-19 and Institutionalization Measures." Photo by Yonhap News

[Asia Economy Reporter Son Sun-hee] Prime Minister Chung Sye-kyun said on the 28th, "To prevent household debt from increasing further, the government needs to increase the scale of national debt a little more." This remark came during a discussion where Yoon Hu-duk, a member of the ruling Democratic Party and chairman of the National Assembly's Planning and Finance Committee, advocated for the necessity of providing a 4th round of disaster relief funds. It is interpreted as expressing consensus with the ruling party's claim for the 4th disaster relief payment.

On the same day, at the Prime Minister's official residence in Jongno-gu, Seoul, during the Thursday Dialogue on the topic of 'Institutionalizing Loss Compensation,' Prime Minister Chung said, "If households become sound, we can consider ways to secure fiscal soundness again through tax systems and other means," adding, "If household debt grows larger than this, society may find it difficult to cope."

Earlier, Committee Chairman Yoon said, "It is appropriate to prepare so that the 4th disaster relief fund can be widely supported in line with the timing of the legislation for the business loss compensation system," and directed toward Kim Yong-beom, the 1st Vice Minister of the Ministry of Economy and Finance, who was also present, "The state must be prepared to borrow quickly. If funds are insufficient, issuing government bonds will inevitably be necessary."

Prime Minister Chung also expressed consensus on government bond issuance and is expected to soon begin ruling party-government discussions for the payment of the 4th disaster relief fund.

Regarding the COVID-19 loss compensation system, Prime Minister Chung emphasized its necessity by stating, "This is not a matter of policy choice but a matter of constitutional spirit and justice," and said, "The system must be institutionalized to ensure precise compensation proportional to losses." However, toward the Ministry of Economy and Finance, which is showing a cautious stance due to concerns about fiscal burden, he also said, "There are voices of concern about the Ministry of Economy and Finance, but we must not overlook the fact that it has played its role well so far," and evaluated, "It is fortunate that South Korea's national debt is not severe compared to other OECD countries. The fiscal authorities have also done well in managing and safeguarding the treasury."

Prime Minister Chung Sye-kyun is greeting Kim Yong-beom, the 1st Vice Minister of Strategy and Finance, at the 34th Thursday Dialogue held on January 28, 2021, at the Prime Minister's official residence in Samcheong-dong, Seoul, under the theme of "Compensation for Business Losses Due to COVID-19 and Institutionalization Measures." Photo by Yonhap News.

At the event, along with Vice Minister Kim of the Ministry of Economy and Finance, Kang Sung-cheon, Vice Minister of the Ministry of SMEs and Startups (acting minister), Kim Im-yong, acting president of the Korea Federation of Micro Enterprise, Professor Lee Woo-jin of Korea University, and Professor Woo Seok-jin of Myongji University were also present.

Vice Minister Kim said about the loss compensation system, "The most discussed part is the support target," adding, "For small business owners, there are standards under the Small Business Support Act, but detailed criteria differ by industry, and many complaints were raised regarding such standards when executing the disaster relief funds this time."

He continued, "There is the issue of what to do for those who think they suffered similar damage as small business owners," and added, "Special-type workers (teukgo) and freelancers were supported in other ways earlier, so we need to look at that (small business owners') scope." He also said, "Each target, criterion, and amount requires social public discussion, so a considerable and reasonable amount of time will be needed for review."

Kim, acting president of the Korea Federation of Micro Enterprise, said, "This is not the time to worry about finances," and added, "Small business owners are struggling to breathe, and urgent financial orders from the president are also necessary," demanding retroactive application of damages caused by last year's COVID-19 quarantine measures.

However, Prime Minister Chung firmly stated in response, "This is unrelated to retroactive application, as the government intends to take responsibility and compensate going forward."

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