4th Round of Support Funds, Party "Universal" vs Government "Selective" Direct Clash... Quarantine Is Key

Prime Minister Chung Sye-kyun is entering the National Assembly plenary session on the 3rd, passing by Deputy Prime Minister for Economy Hong Nam-ki during the floor leader's policy speech by Joo Ho-young, the floor leader of the People Power Party. Photo by Yoon Dong-joo doso7@

[Sejong=Asia Economy Reporters Son Seon-hee and Oh Ju-yeon] The Democratic Party of Korea and the government, having officially announced the payment of the 4th disaster relief fund, are forecasting a difficult negotiation process. They have clashed head-on over the payment methodology even before discussing the funding plan. As the ruling party, mindful of the upcoming April by-elections, began advocating for 'universal payment,' the financial authorities immediately countered with a 'no' stance. The main discussions are expected to take place in the March National Assembly session, with the COVID-19 quarantine situation likely to be a key factor in reaching an agreement.

On the morning of the 3rd, Lee Nak-yeon, leader of the Democratic Party of Korea, said at the Supreme Council meeting held at the National Assembly, "I hope that tailored support and universal support will both be placed on the table for discussion during the party-government consultations." This was a challenge to the 'universal + selective' concurrent policy mentioned the previous day by Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki in his negotiation group representative speech, and he pressed the issue again.

The reason why the party and government are engaged in a tug-of-war over 'universal or selective' even before starting discussions is that the scale of funding required varies greatly depending on the methodology. Last year, the budget for the 1st disaster relief fund, which was universally paid to all citizens, was about 14.3 trillion won. In contrast, the 2nd and 3rd support funds, selectively paid to vulnerable groups such as small business owners and self-employed individuals, ranged between 7 trillion and 9 trillion won, remaining in the single-digit trillions. From the Ministry of Economy and Finance's perspective, cautiousness about the size of the supplementary budget (추경) is inevitable, making 'selective payment' unavoidable. This is why Deputy Prime Minister Hong appealed, saying, "It is difficult for the government to accept doing both universal and selective support at the same time."

Within the ruling party, there are critical voices against Deputy Prime Minister Hong, who openly opposed the content of the ruling party leader's speech. A key member of the Democratic Party's Supreme Council said, "We understand the financial authorities' conservative stance, but Deputy Prime Minister Hong's remarks are very inappropriate," adding, "If negative opinions are repeatedly expressed, it will only become a greater burden for the Moon Jae-in administration."

The disagreement between the party and government over the payment scale is expected to be influenced by the quarantine situation going forward. Park Hong-geun, the ruling party's budget and accounts committee floor leader, said, "If the COVID-19 confirmed case trend shows signs of calming, there is an opinion within the party that a (universal payment) approach is necessary to stimulate consumption," but added, "If (quarantine measures such as business suspension and restrictions) continue for a long time, the focus will be on supporting those who have suffered damages." He continued, "We need to conduct sufficient internal review while monitoring the future quarantine situation to determine the appropriate design."

The opposition party proposed forming a consultative body involving the ruling party, opposition, and government regarding the 4th disaster relief fund discussions. On the same day, Joo Ho-young, floor leader of the People Power Party, stated in his negotiation group representative speech, "In addition to loss compensation and disaster relief funds, we will promote support for 'emergency survival funds' for self-employed and small business owners who are facing threats to their survival due to government (business) restriction measures," and announced plans to form a consultative body.

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