The supplementary budget bill worth 11.7 trillion won to overcome the novel coronavirus infection (COVID-19) passed the National Assembly on the 17th. (Photo by Yonhap News)
[Asia Economy Reporter Kwangho Lee] The supplementary budget (supplementary budget) worth 11.7 trillion won to overcome the novel coronavirus infection (COVID-19) passed the National Assembly on the 17th. The revenue adjustment budget and job budget were reduced, while the support budget for the Daegu and Gyeongbuk regions and the supply of funds to small business owners were expanded.
The ruling and opposition parties held a plenary session on the night of the 17th and passed the 'COVID-19 supplementary budget' with such contents. It was 12 days since the government submitted the supplementary budget bill to the National Assembly on the 5th. The revised supplementary budget was approved with 222 votes in favor, 1 against, and 2 abstentions out of 225 members present.
The ruling and opposition parties maintained the original government proposal (11.7 trillion won) but effectively increased the scale of fiscal expenditure by reducing revenue adjustments and increasing expenditure adjustments. In the original supplementary budget, revenue adjustments were 3.2 trillion won and expenditure adjustments were 8.5 trillion won, but the ruling and opposition parties reduced 2.4 trillion won in revenue adjustments and cut 680 billion won from project budgets and contingency funds less related to COVID-19 in the expenditure section.
With no change in the total supplementary budget amount, the fiscal deficit ratio to gross domestic product (GDP) remained at 4.1%, and the national debt ratio to GDP was maintained at 41.2%, the level of the government proposal.
By project, 28.9 billion won was cut from the Employment Success Package, 150 billion won from high-efficiency home appliance purchase rebates, 52.4 billion won from additional youth employment incentives, and 99.9 billion won from job stabilization funds. The purpose contingency fund was also reduced from 1.35 trillion won to 1 trillion won and converted into project funds, reducing a total of 681.2 billion won.
The total surplus budget of 3.0812 trillion won, including the 681.2 billion won cut in project funds and 2.4 trillion won deducted from revenue adjustments, was used for support budgets for Daegu and Gyeongbuk, which were hit hard by COVID-19.
With Daegu, Cheongdo, Gyeongsan, and Bonghwa declared special disaster areas, an additional budget of 1 trillion won was allocated as follow-up support. A new disaster countermeasure fund of 400 billion won was added for recovery from damage in special disaster areas and support for affected small business owners, and 226.2 billion won was added for support for reopening stores that were closed or suspended. A new budget of 73 billion won was also allocated to support a 50% reduction in electricity bills for small business owners in special disaster areas for six months.
In addition, a new budget of 84.8 billion won was allocated for mask supply, and 37.5 billion won was increased to expand 150 negative pressure beds. An additional 1.4 trillion won was also added to strengthen finances for expanding fund supply to small business owners. Furthermore, 240 billion won was added for the supply of bond-backed securities targeting industries affected by COVID-19, such as aviation, shipping, and transportation.
The consumption coupons for low-income households were increased by 173.6 billion won, expanding the support target from basic livelihood security recipients to legally defined lower-income groups. With this increase, about 310,000 households and 410,000 people are expected to receive additional benefits. The support amount is a coupon worth about 170,000 won per month for a two-person household.
In addition, 200 billion won was added for emergency welfare budgets, value-added tax reductions, 36.5 billion won for dual-income worker childcare support, and 32 billion won for kindergarten operation support.
The government plans to convene an extraordinary Cabinet meeting at 2 p.m. on the 18th to approve the supplementary budget announcement and allocation plan.
An official from the Ministry of Economy and Finance said, "We plan to do our best to promptly execute related projects so that the supplementary budget can be implemented on the ground as soon as possible and contribute to overcoming COVID-19," adding, "We will hold monthly fiscal management inspection meetings to continuously monitor the execution status and proactively resolve execution difficulties."
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