Delay in Issuance of Dining, Movie, Performance, Exhibition, and Tourism Coupons
Previously Distributed Coupons Remain Usable Amid Concerns Over 'Retroactive Application' Controversy
[Asia Economy Reporter Jang Sehee] The 170 billion won '8 Major Consumption Coupons' policy was ultimately suspended due to the resurgence of the novel coronavirus infection (COVID-19). As new confirmed cases surged, the substitute holiday on the 17th also failed to fully enjoy the effect of domestic demand recovery. There are criticisms that the government, in its rush to revive domestic demand, caused confusion in COVID-19 quarantine with premature policies. Experts advise finding ways to naturally boost consumption rather than artificial stimulus measures such as issuing consumption coupons.
According to the government on the 18th, the issuance of dining, movie, performance, exhibition, and tourism coupons will be postponed. This decision came as domestic COVID-19 new confirmed cases recorded triple digits for four consecutive days and cluster infections continued, leading to the elevation of social distancing to level 2.
A government official said, "Although face-to-face consumption has become difficult, some coupons can still be used online," adding, "Considering comprehensive indicators such as the trend of COVID-19 spread, export performance from the 1st to the 20th of this month, and industrial activity trends in July, additional response measures are expected to be announced." They are also considering ways to raise the growth rate through measures in export and investment sectors to compensate for the domestic demand that has cooled due to the temporary suspension of consumption coupons. However, coupons already issued on the 14th and 15th can still be used. The government explained that, in principle, retroactive application could violate the 'principle of trust protection,' so benefits will be provided for already distributed coupons.
The Ministry of Agriculture, Food and Rural Affairs announced on the 15th, "The dining activation campaign will be temporarily suspended starting at midnight on the 16th," and "issuance of new rural travel coupons will also be temporarily suspended." However, discount coupons issued so far will be allowed to be used under strict quarantine management until the end of August. The Ministry of Culture, Sports and Tourism also stated, "Already distributed movie and museum discount coupons can be used under strict quarantine, but additional distribution after the 16th will be temporarily suspended."
There are criticisms that the government's economic stimulus measures linked to the substitute holiday were premature. Earlier, Prime Minister Chung Sye-kyun said, "To provide some rest time for the exhausted people and medical staff and to continue the flow of domestic demand recovery, it is necessary to consider designating August 17 as a temporary holiday," thereby setting the 17th as a temporary holiday.
Experts point out that the effect of stimulating domestic demand through face-to-face consumption is limited. Professor Sung Tae-yoon of Yonsei University's Department of Economics said, "Rather than the government directly financing to boost domestic demand, regulations should be eased to allow consumption to flow naturally," adding, "Following emergency disaster relief funds, it is difficult to see that consumption coupons have significantly helped the actual economic effect."
Professor Kim Tae-gi of Dankook University's Department of Economics also said, "Confusion is only increasing as policies such as the use of already distributed coupons, suspension, postponement, and use of coupons vary," adding, "There is a limit to raising growth rates by boosting final consumption." He further stated, "Instead of support through cash and gift certificates, ways to increase intermediate consumption should be considered."
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