[Opinion] Supplementary Budget Focused on Vulnerable Groups Accelerates Overcoming the COVID-19 Crisis

Since the third wave of COVID-19 began last winter, the number of new confirmed cases has stubbornly remained around 500, showing no signs of decline. This has deepened the public's fatigue and exacerbated difficulties in people's livelihoods. The situation was quite different last fall. Thanks to the success of K-quarantine and strong exports, South Korea seemed to be escaping the COVID-19 crisis faster than other countries. However, the situation reversed as winter approached.

As COVID-19 quarantine measures have prolonged, economic polarization has intensified further. While some sectors have enjoyed a boom to the extent of being called a COVID-19 special, the service industry, which relies heavily on face-to-face services, continues to struggle. As a result, many self-employed individuals, workers in special employment types, and simple daily wage workers who make their living in this sector are facing severe livelihood difficulties. Although a third disaster relief package worth 9.3 trillion won has been implemented this year, it has become clear that this level of support is insufficient to adequately respond to the unexpectedly prolonged quarantine measures. There are even reports of many self-employed business owners closing their shops and switching to delivery services.

In a situation where livelihoods are threatened, can proper quarantine guidelines be followed? We cannot simply blame the irresponsible behavior of some citizens for the persistent number of confirmed cases.

This awareness has led to increased calls for the government to implement more active livelihood support measures. The government established the first supplementary budget for this year, and last month, a supplementary budget worth 14.9 trillion won passed the National Assembly. The fact that it passed with only minor revisions and without severe confrontation between ruling and opposition parties likely reflects a nationwide consensus on the need for swift and proactive response.

This supplementary budget is broadly composed of three areas: support for affected groups, response to employment shocks, and quarantine needs such as vaccines. The principle applied was to "focus on groups most affected," "provide more substantial support," and "strengthen blind spots as much as possible." Looking at the support measures for affected groups, which received the largest allocation of the supplementary budget, businesses with five or more regular employees were also included as beneficiaries. Additionally, the sales cap for eligible general businesses was raised from 400 million won to 1 billion won. The types of support were subdivided into seven categories, and the maximum support amount was increased from 3 million won to 5 million won. General businesses with decreased sales still receive only 1 million won as before, but businesses subject to extended closure orders, such as indoor sports facilities, can receive up to 5 million won.

Of the 14.9 trillion won supplementary budget, 5 trillion won, equivalent to one-third, was mobilized from available surplus funds, minimizing the issuance of government bonds. Considering that the average national debt ratio of OECD countries exceeds 100% of GDP, concerns about fiscal soundness due to the supplementary budget are excessive. After the supplementary budget was approved, support payments have also been made. For those in difficult circumstances, the support funds will be like "rain in a drought."

Of course, there are still shortcomings. Since incomes are not precisely identified, the support is far from personalized for each individual. Although the maximum amount has been raised and electricity bill discounts are provided, the support amount is by no means sufficient. However, given that much time will still be required until the end of COVID-19, continuous consideration and countermeasures on how to support vulnerable groups are necessary. Naturally, future measures should also include the creation of new jobs through education and training.

Jeong Se-eun, Professor of Economics, Chungnam National University

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