Possibility of 'Generous' Disaster Relief Fund Beyond Loss Compensation... Both Minister and Standing Committee Chairperson

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] As the COVID-19 Loss Compensation Act faces difficulties over retroactive application, there is a growing possibility of shifting toward sufficiently providing additional disaster relief funds.

On the 28th, Lee Hak-young, Chairman of the National Assembly Industry, Trade, Energy, Small and Medium Enterprises Committee, said in a phone interview with Asia Economy, "We need to politically decide whether to pursue alternative measures to resolve the loss compensation issue," adding, "The government continues to oppose it due to administrative burdens in calculating losses and potential future disputes, so a realistic approach could be to boldly provide disaster relief funds through a decision by the government and political circles."

The government plans to provide compensation only for the restricted business periods and hours based on profits, so it expects the compensation amount to be less than anticipated or, in many cases, to result in refunding existing disaster relief funds. Ultimately, legal disputes are inevitable, and there are concerns that this could lead to significant public dissatisfaction.

Chairman Lee stated, "If loss compensation is legislated, the government will need a legal basis for compensation and will calculate it according to a somewhat strict legal logic," adding, "It is difficult to calculate individually, and if it goes to court, it will cause great confusion, which is the government's position."

He continued, "Providing disaster relief funds uniformly by industry could be a way to avoid disputes and confusion. We also need to consider the anticipated chaotic situations if retroactive loss compensation is decided."

At the legislative hearing on the Loss Compensation Act on the 25th, Chairman Lee also demanded that the government prepare about 20 trillion won in resources, considering the increase in Gross Domestic Product (GDP).

The government is also leaning toward additional disaster relief funds. Kwon Chil-seung, Minister of SMEs and Startups, stated at a press conference marking his 100th day in office, "Discussions on the legalization of the small business loss compensation system should be conducted separately, and we need to consider support methods that put out the urgent fire first."

Minister Kwon also said, "To alleviate management difficulties caused by gathering bans and business restrictions, we will introduce innovative inclusive finance systems for small business owners, such as unprecedented low-interest rates and long-term loans that exceed market expectations." Since Minister Kwon was appointed in January as a member of the Democratic Party, communication with the party is expected to be relatively smooth.

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