"COVID-19 Supplementary Budget, Coupon Distribution Scale Excessive... Subject to Cuts" Opposition and Expert Reactions

Opposition Party Points to Possible Cuts in Some Measures Including Coupon Issuance
"Need to Consider Impact on Overall Economy"
"Effectiveness of Good Landlord Support Plan Also in Question"

[Sejong=Asia Economy reporters Kim Hyun-jung and Jang Se-hee] Ahead of the implementation of the supplementary budget (supplementary budget) plan announced by the government for the early termination of the novel coronavirus infection (COVID-19), the opposition party has evaluated some measures as 'subject to cuts,' signaling conflict. Experts are also questioning the effectiveness of measures such as 'support for good landlords.'

On the 4th, Song Eon-seok, a member of the Future United Party and former Vice Minister of Strategy and Finance, pointed out, "We need to examine how the supplementary budget plan includes revenue adjustment budgets when no tax revenue has come in this year," adding, "Replacing the part where tax revenue falls short with national bonds is an act of ignoring the National Assembly and is difficult to accept." He further stated, "If budgets unrelated directly to COVID-19 are cut, the issuance of deficit bonds can be reduced."

Kim Kwang-rim, a member of the Future United Party who served as Vice Minister during the Ministry of Finance and Economy era, identified coupon issuance as a candidate for cuts. Kim said, "It is difficult to see the five major consumption coupon measures as having a direct impact on COVID-19 support," adding, "While restoring the status quo before COVID-19 is important, the overall economic impact afterward must also be considered."

Kim Jong-seok, a member of the Future United Party, expressed his intention to examine whether the budget for the construction of an infectious disease specialized hospital in the Yeongnam region falls under social overhead capital (SOC) budget. Kim said, "If there is no effect in the short term, it could be considered construction SOC," adding, "It should be a project that actually has an economic stimulus effect rather than a budget for election purposes."

Experts are raising issues with the 'good landlord' support plan. They argue that landlords and tenants could collude to pretend that rent adjustments were made, and that livelihood-type landlords with limited rent reduction scope are politically labeled as 'bad landlords.' Lee Sang-min, senior researcher at the National Fiscal Research Institute, pointed out, "During the 2015 Middle East Respiratory Syndrome (MERS) outbreak, the 1+1 concert ticket policy project was tainted by subsidy fraud," adding, "There is a possibility that landlords and tenants could engage in so-called 'collusion' to share government tax credit benefits, which is also difficult to detect." He emphasized, "From the perspective of stimulating consumption, providing building disinfection, window frame replacement, and cleaning services would be more effective than tax exemptions."

Joo Won, head of the Economic Research Office at Hyundai Research Institute, said, "It personifies landlords with good intentions, but there is a high risk of abuse," adding, "Cases attempting deception will appear, but it will be difficult to filter them administratively." Regarding the overall content of the supplementary budget plan, Joo added, "If the situation prolongs, the possibility of a second supplementary budget in the second half cannot be ruled out, given that the main budget has been significantly increased."