[Exclusive] Lee Hak-young, Chair of the Industry Committee, "Loss Compensation Should Be Applied Retroactively to Last Year... Considering Disaster Relief Funds"

Democratic Party's Key Bill Focuses on 'Losses After Fear'... Yet "Many Opinions on Calculating Total Losses"
Finance Ministry Still Reluctant: "Businesses Under Gathering Ban Have Already Received About 11.5 Million Won"

Lee Hak-young, Chairman of the Industry, Trade, Energy, Small and Medium Enterprises and Startups Committee, delivers a welcoming speech at the 1st Industrial Technology Future Forum titled "Digital and Carbon Neutrality, the Path to the Future of K-Industry," held on the 22nd at the Glad Hotel in Yeouido, Seoul. Photo by Moon Ho-nam munonam@

[Asia Economy Reporter Park Cheol-eung] There is growing momentum to apply COVID-19 loss compensation retroactively and comprehensively, going back to around August last year when business restrictions were fully implemented. On the 22nd, Lee Hak-young, Chair of the National Assembly’s Industry, Trade, Energy, Small and Medium Enterprises Committee, said in a phone interview with Asia Economy, "We will compensate retroactively from last year, and considering the disaster relief funds already paid, we can cover the shortfall," adding, "There are many thoughts within the Democratic Party to calculate the total losses."

Regarding loss compensation, there are currently 35 bills pending in the National Assembly, including separate special bills, laws related to small business owners, and amendments to the Infectious Disease Control Act. Among these, the amendment to the Small Business Protection Act proposed by Democratic Party lawmaker Song Gap-seok in February is being focused on in the Industry Committee, which states that compensation applies "only to losses incurred after the law is promulgated." Since the law only allows limited retroactive application during the gap between passage and enforcement, it falls short of small business owners’ demands to cover the entire period of business restrictions.

Chairman Lee said, "If small business owners want, compensation should start from the very beginning when business restrictions began," adding, "It’s not about compensating all losses, and since compensation has been provided in the form of disaster relief funds so far, wouldn’t it be enough to cover the shortfall after setting compensation standards?" He further stated, "While the principles of compensation will be established through the bills under discussion, the specified retroactive policy is seen as inadequate."

On the 19th, during a government questioning session at the National Assembly, Democratic Party lawmaker Min Byung-duk also said, "I believe the principle is to compensate retroactively to the point when administrative orders began," adding, "Loss compensation should be applied retroactively, and existing government support should be deducted." He emphasized, "If losses incurred by faithfully following government administrative orders are ignored, it is not the duty of the state."

Along with lawmaker Min, first-term lawmakers from both the Democratic Party and the People Power Party are strongly advocating for retroactive application of loss compensation. In the People Power Party, lawmaker Choi Seung-jae, a former president of the Small Business Federation, has been demanding retroactive application and even staged a sit-in protest in front of the National Assembly main building for ten days.

Justice Party lawmaker Shim Sang-jung also recently stated in a party meeting, "The very word ‘retroactive’ is unnecessary. The word ‘compensation’ itself already implies retroactivity," adding, "The COVID-19 loss compensation law should naturally include the state’s obligation to fulfill debts for losses incurred throughout the entire period following the state’s COVID control measures."

However, the Ministry of Economy and Finance still expresses reluctance. On the 19th, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki said in response to questions at the National Assembly, "Those in the business sectors subject to closure orders have received about 11.5 million won," adding, "Would retroactive support be acceptable to the public? There are concerns about that, and we cannot ignore the general principles of fiscal policy."

The political sphere is taking the stance that if there is bipartisan agreement, the measure will be pushed through. Hong Ik-pyo, Chair of the Democratic Party Policy Committee, said in a recent phone interview, "Since this is a legislative matter, even if the Ministry of Economy and Finance opposes it, it will be pursued with bipartisan agreement."

Although discussions are scheduled in the National Assembly Industry Committee subcommittee today, it is expected to take some time. Song Gap-seok, the ruling party’s secretary of the Industry Committee, mentioned on the 20th, "It doesn’t seem likely to be easy in this week’s bill subcommittee. It may have to be postponed to May."

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