Government Unavoidable to Adjust Cashback and Other Consumer Stimulus Measures Amid Step 4 Social Distancing Upgrade

[Image source=Yonhap News]

[Asia Economy Reporter Kim Eunbyeol] As the fourth wave of COVID-19 begins, adjustments to the government's planned consumption stimulus measures have become inevitable. The plan was to encourage "bold and active consumption" using the Win-Win Consumption Support Fund (card cashback), consumption coupons and vouchers, and local love and Onnuri gift certificates, but the rapid deterioration of quarantine conditions has made this difficult. With the cashback, which was scheduled to be applied from early next month, likely to be postponed, some voices are calling for the cashback to be scrapped entirely and the budget to be redirected to support vulnerable groups.

According to the government on the 11th, the Ministry of Economy and Finance is considering adjusting the implementation period of the Win-Win Consumption Support Fund, which refunds increased card usage amounts as points. The period may be delayed from August?October to September?November. Cashback is a policy encouraging people with spending capacity to dine out at local restaurants and spend money at places like hair salons and gyms. However, with the recent sharp increase in new COVID-19 cases, it has become difficult to encourage face-to-face consumption.

Inside and outside the political circles, there are calls to cancel the cashback policy altogether and use the allocated budget of 1.1 trillion won to provide stronger support to self-employed individuals affected by the Level 4 social distancing measures. There is also speculation that if, during the National Assembly discussions, the eligibility for the National Support Fund expands from the bottom 80% income group to the entire population, the argument to scrap the cashback will gain more traction.

However, there are concerns that discussions about consumption stimulus measures should be approached cautiously so they are not perceived as signals to ease quarantine measures. If the COVID-19 spread subsides and stimulus measures are implemented, only to have social distancing strengthened again when cases rise, the damage to self-employed individuals could worsen.

In this regard, Lee Eokwon, the First Vice Minister of the Ministry of Economy and Finance, said on the 7th, "We will closely monitor the COVID-19 situation and continue to consult with quarantine authorities on the timing and implementation of policies according to the circumstances."

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