[Public Voices] Passing Next Year's Budget On Time Brings Hope to Small Business Owners

There are 7,335,000 small business owners in South Korea, accounting for 95% of all enterprises. The number of employees reaches 10,462,000. Beyond simply functioning as retailers and wholesalers, they play social and public roles, forming the roots and foundation of the Korean common people's economy.

When visiting the field and listening to small business owners, many express difficulties in operating their businesses. Although there was hope that the economy would recover once the nearly three-year-long COVID-19 pandemic ended, adverse factors continue, including the intensification of the "three highs" phenomenon?high inflation, high interest rates, and high oil prices?rising raw material costs, increases in public utility fees such as minimum wage and energy, and rising rents. The accumulated burden of inflation and prolonged high interest rates have continuously increased the interest burden on vulnerable groups and small business owners. As of the second quarter, the outstanding loans to self-employed individuals announced by the Bank of Korea exceeded 1,043 trillion won, the highest ever. This figure shows how severely Korean small business owners are currently in crisis.

Small business owners are the foundation of our country's livelihood economy. The domestic economy will revive only when small business owners are revitalized. This is why the government has prepared a budget of 4.9882 trillion won for next year’s small business support, an increase of about 800 billion won compared to this year, to help small business owners normalize management and stably increase sales despite the government's fiscal tightening stance. With the significantly increased budget, the government plans to focus support where it is most needed by implementing customized support policies reflecting the growth potential and industry characteristics of small business owners, supporting digital transformation, and resolving financial difficulties and providing recovery support for micro small business owners.

To nurture small business owners who grow into innovative entrepreneurs by demonstrating creative capabilities beyond livelihood startups, the government increased the budget for the "Entrepreneurial Small Business Development Project" by 13.7 billion won compared to this year. In line with the digital transformation era, the budget for the "Smart Technology Support Project," which integrates smart technology into small business operations, was increased by 24.1 billion won.

Reflecting the reality of increasing interest burdens on vulnerable groups and small business owners, the government plans to increase the "Small Business Policy Fund" by 800 billion won next year to help small business owners secure self-sustainability. To alleviate financial difficulties, a new "Small Business Debt Refinancing Loan" worth 500 billion won has been established, allowing high-interest loans to be converted to low-interest loans or loans that are difficult to extend maturity in the private sector to be converted into policy funds. The management safety policy fund will be supplied with an additional 300 billion won compared to this year, creating an environment where small business owners can operate stably. The "Self-Employed Employment Insurance Support" will also be increased to the largest scale ever. It has been increased by 10 billion won compared to this year, enabling support for up to 40,000 people annually. The insurance premium support rate has been raised to a maximum of 80%, reducing the insurance premium burden on small business owners.

This budget will be a great help for small business owners to overcome the crisis and grow into key players in the Korean economy. We hope that the next year’s budget will be passed by the National Assembly within the statutory deadline so that small business owners can escape difficulties. The Small Enterprise and Market Service will do its best to serve as a bridge by conveying the voices of small business owners in the field to the government and the National Assembly until the next year’s small business support budget is reviewed and approved by the National Assembly, and once the budget is passed, to ensure that government policies are fully delivered to small business owners in the field.

Park Seong-hyo, Chairman of the Small Enterprise and Market Service

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