[Initial Insight] Supplementary Budget in the Post-Corona Era

[Asia Economy Reporter Kim Jong-hwa] While browsing various news and blogs on the internet as usual, my attention was caught by a certain post. It was a resignation story written by a woman in her early 30s who was recommended to resign from her first-ever job due to her company's difficulties caused by the novel coronavirus infection (COVID-19).

Along with her experience of leaving the job unprepared and struggling to adapt to the changed life, the post contained valuable information on how to receive severance pay and unemployment benefits, how to handle the National Pension and Health Insurance?which used to be automatically deducted as a workplace subscriber but now must be managed alone?and how to manage loans taken out based on the continuity of salary.

The parts about managing suddenly increased free time and reduced money felt like countless self-help books in the world, so they did not particularly interest me. However, the personal experiences shared in a calm tone about how she came out as unemployed to family and relatives, and how she soothed the emotions that welled up despite seeming to have settled, were quite impressive.

The term "post-COVID era" has been heard more frequently. It is a neologism referring to the new era that will come after COVID-19, better described as overcoming COVID-19 or coexisting at a controllable level.

Many expert predictions about the unprecedentedly changing near future are also emerging. Both the government and companies are busily moving, pondering what and how to prepare for the "uncharted path" of the post-COVID era.

The future is always uncertain, but one thing seems certain. We all know that the reality of the post-COVID era will be very difficult for the vast majority of people, including the author of the resignation story introduced earlier, albeit to varying degrees. Is there a sadder paradox than the optimistic slogan of turning crisis into opportunity? It goes without saying that timely welfare policies and fiscal policies by the government are more necessary than ever.

On the 3rd, the largest-ever third supplementary budget bill for this year passed the National Assembly plenary session. Following the first supplementary budget of 11.7 trillion won and the second of 12.2 trillion won, the third supplementary budget of 35.1 trillion won was added, bringing nearly 60 trillion won in additional spending budgets this year alone. Not only the size of the supplementary budget but also the fact that three supplementary budgets were prepared in one year for the first time in 48 years since 1972 shows that the urgency is on a different level than usual.

The purpose of the supplementary budgets is all to respond to the COVID-19 crisis. The first supplementary budget secured emergency quarantine funds for COVID-19, and the second was for providing emergency disaster relief funds to all citizens. An unprecedented direct economic stimulus campaign was promoted to revive consumption that had stopped due to social distancing. So what about this third supplementary budget? The focus is on job retention.

As unemployment caused by the COVID-19 crisis became full-fledged from the second quarter, this budget aims to respond to it. The budget for employment retention subsidies, which supports wages and other costs when companies maintain employment without laying off workers, was significantly increased.

Also included was the emergency employment stabilization subsidy budget, which provides 500,000 won per month for three months to special employment workers, freelancers, small business owners, and unpaid leave workers who had to stop working due to COVID-19. This targets people without employment insurance who cannot receive unemployment benefits. Financial support for low-income groups and small business owners will also increase.

The government intends to help those whose jobs are at risk keep their jobs and maintain their livelihoods, and for those who lose their jobs, to prevent them from falling immediately into extreme poverty and give them time to find new work and regain stability.

The main opposition party, the United Future Party, did not participate, and the Justice Party, opposing the sole passage, cast abstentions with all seven members in this third supplementary budget. The Democratic Party evaluated it as "preparing the 'primer' to overcome the national crisis of COVID-19." They also stated, "We will focus on taking care of people's livelihoods through swift and bold fiscal investment." Hopefully, as the statement says, this will provide solid support through the proper implementation of welfare fiscal policies for the people navigating the post-COVID era.