Ruling Party and Government: "Supplementary Budget Size Will Far Exceed 6.2 Trillion Won... Support for Restarting Closed Businesses" (Comprehensive)

"Emergency Management Stabilization Fund for SMEs and Ultra-Low Interest Loans for Small Business Owners Each Expanded by 2 Trillion Won"
Support for Recovery of Businesses Closed Due to Visits by COVID-19 Confirmed Cases
Consideration of Incentives for Voluntary Rent Reduction by Landlords
Provision of Childcare Coupons to 2.36 Million Parents with Children

[Image source=Yonhap News]

[Asia Economy reporters Wondara and Jeon Jinyoung] The Democratic Party of Korea and the government are expected to draft an additional supplementary budget for the novel coronavirus disease (COVID-19) exceeding 6.2 trillion won. In this supplementary budget, the ruling party and government plan to include measures not only to expand medical facilities but also to support the recovery of businesses temporarily closed due to visits by confirmed COVID-19 patients, as well as incentives for voluntary rent reductions by building owners.

On the morning of the 2nd, Cho Jung-sik, chairman of the Democratic Party’s Policy Committee, said at a briefing held after the 'COVID-19 Response Supplementary Budget Drafting Party-Government Meeting' at the National Assembly, "The final supplementary budget amount will be finalized by the Ministry of Economy and Finance’s final estimate and will be confirmed at the Cabinet meeting in the middle of this week."

He added, "It is still difficult to specify the exact size of the supplementary budget, but in terms of overall scale, it will be drafted to exceed the expenditure budget of the supplementary budget during the Middle East Respiratory Syndrome (MERS) outbreak by a large margin." The supplementary budget executed during the MERS crisis was 6.2 trillion won.

The supplementary budget is expected to focus on expanding medical facilities and compensating small business owners for their damages.

Chairman Cho explained, "We have decided to expand emergency management stabilization funds for small and medium-sized enterprises and ultra-low interest loans for small business owners by 2 trillion won each, and also to increase support for special guarantees by the Korea Credit Guarantee Fund by 2 trillion won." He also said, "Support will be provided to ease the burden on small business owners to maintain employment for workers, and an incentive plan for voluntary rent reductions by landlords will also be reviewed."

Measures will be prepared to support the recovery of businesses temporarily closed due to visits by confirmed COVID-19 patients, and to promote consumption in traditional markets by issuing an additional 500 billion won worth of Onnuri gift certificates. The issuance scale of local love gift certificates will be expanded by 3 trillion won.

Consumption coupons will be provided to low-income groups, child-rearing coupons to 2.36 million parents with children, and additional incentives will be offered to working elderly people who receive 30% of their wages in gift certificates. The plan also includes a significant expansion of a 10% refund on purchases of high-efficiency home appliances.

For the severely affected Daegu and Gyeongbuk regions, special support measures will be prepared, including ▲building medical infrastructure ▲emergency fund support for affected small and medium-sized enterprises and small business owners ▲separate allocation of support budgets for regional economic recovery. Negative pressure rooms, ambulances, testing and analysis equipment expansion, and living support expenses for hospitalized and isolated patients will also be reflected in this supplementary budget.

Chairman Cho said, "The supplementary budget containing these measures will be submitted to the National Assembly within this week and will be promptly processed during the February extraordinary session."

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said, "Regarding the supplementary budget drafting, we have worked overnight throughout last week to ensure it can be finalized during the February extraordinary session ending on the 17th. After today’s party-government meeting, the Cabinet meeting will be held on Wednesday (the 4th), and we are proceeding on a super-fast schedule to submit it to the National Assembly by Thursday (the 5th)."

He continued, "This supplementary budget project was selected focusing on projects deemed absolutely necessary for COVID-19 prevention and damage recovery, based on three principles: urgency, executability, and temporariness." He emphasized, "The government will make thorough preparations to ensure not only review but also rapid execution."

Meanwhile, attendees at the meeting included Democratic Party Standing Election Committee Chairman Lee Nak-yeon, floor leader Lee In-young, Policy Committee Chairman Cho Jung-sik, National Assembly Planning and Finance Committee Chairman Lee Chun-seok, Budget and Accounts Special Committee Secretary Jeon Hae-cheol, Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki, and 2nd Vice Minister of Economy and Finance Koo Yoon-chul.