Government Aims to Catch Two Rabbits of Economy and Quarantine During Seollal Holiday...Injecting Money and Offering Discounts (Comprehensive)

[Sejong=Asia Economy Reporters Kim Hyunjung and Jang Sehee] Ahead of the Seollal holiday, the government is aiming to achieve two goals simultaneously: ‘stimulating consumption’ and ‘strengthening quarantine measures.’ While swiftly providing support funds to small business owners and vulnerable employment groups hit hard by the prolonged COVID-19 pandemic, the government plans to open the door to economic recovery through various discount benefits and consumption campaigns.

The Democratic Party of Korea and the government held a high-level party-government consultation meeting at the National Assembly in Yeouido, Seoul on the 20th, where they prepared the ‘Seollal Livelihood Stabilization Measures’ with these contents. Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, explained at the meeting, "We have prepared related measures with an urgent mindset to provide stepping stones for livelihood stabilization and pillars for economic recovery during a safe Seollal holiday for the people exhausted by COVID-19."

◆ Increasing Employment and Injecting Funds... Corporate Entertainment Expenses Also Raised = The government plans to expedite the already announced support for small business owners and vulnerable employment groups and ensure that ‘money’ circulates in the market through various discount events and gift certificate issuance. First, before the holiday, support funds of up to 3 million KRW will be provided to about 2.5 million small business owners, which is about 90% of the total support scale. In February, 1 million KRW will be given to new applicants for the emergency employment stabilization fund for special types of workers and freelancers, and 500,000 KRW in livelihood support funds will be provided to 90,000 workers in visiting and care services and after-school instructors. Income stabilization funds of 500,000 KRW for 80,000 corporate taxi drivers will also begin to be paid from the Seollal holiday. For 90,000 basic livelihood security recipients, the special Seollal consolation payment will be temporarily increased from 40,000 KRW to 50,000 KRW. Low-income groups such as basic livelihood security recipients and near-poverty groups will receive 30,000 KRW worth of briquette coupons, and 13.3 billion KRW will be supported to 230,000 marginalized people through the Community Chest of Korea.

Deputy Prime Minister for Economy Hong Nam-ki is attending the high-level party-government meeting held at the National Assembly on the 20th, delivering opening remarks. Photo by Yoon Dong-ju doso7@

To revitalize consumption, regulatory relaxation will also be pursued. The standard amount for small corporate entertainment expenses will be raised from under 10,000 KRW to under 30,000 KRW, and the gift value for agricultural, livestock, and fishery products will be temporarily increased from 100,000 KRW to 200,000 KRW (from January 19 to February 24). Speed will also be increased in job creation and financial support. The government will create more than 700,000 direct jobs in January and February and raise the employment retention subsidy rate for workers in restricted or prohibited businesses from two-thirds to nine-tenths for three months. The unpaid leave support fund for special employment support industries will be extended by three months at 500,000 KRW per month. Through special fund loans of 38.4 trillion KRW and loan and guarantee maturity extensions of 10.1 trillion KRW, temporary financial difficulties will be prevented from leading to business deterioration.

◆ To Maintain the Downward Trend... Tightening Quarantine Measures = The party and government also focused on preventing the resurgence of COVID-19. First, 620 screening clinics and 70 infectious disease-dedicated hospitals nationwide will be operated, and living treatment centers will be run continuously to isolate and treat mild and asymptomatic patients.

To support facilities of private medical institutions operating screening clinics, 25.5 billion KRW will be spent before the holiday, and 24.1 billion KRW in contingency funds will be used by February to ensure that infectious disease-dedicated hospitals can smoothly treat COVID-19 patients. From February, nationwide COVID-19 vaccination will begin, starting with medical staff and elderly residents of nursing hospitals and nursing facilities.

Additionally, the government will promote a ‘non-face-to-face Seollal campaign,’ actively encouraging sending video letters or gifts instead of visits. They plan to develop online memorial and ancestral rites services to ensure a quarantine-friendly holiday.

◆ Expanding Supply of Seasonal Goods by 1.4 Times... Discounts at Traditional Markets = In the distribution sector, the focus will be on expanding the supply of seasonal goods and nationwide promotional and discount events. From the 28th of this month to the 10th of next month, the government will increase the supply of 10 major seasonal goods such as cabbage, radish, apples, pears, beef, and pork by 1.4 times (93,000 tons) compared to normal times. In particular, supplies of eggs (125% compared to normal), radish (153%), apples (206%), and pears (186%), which have shown price increases, will be increased and released.

Until March, promotional events for eco-friendly agricultural products will be promoted, and the ‘Let’s Support Korean Agriculture, Seollal Special Exhibition’ involving about 18,000 distribution channels including nationwide large marts and online shopping malls will be held, linking consumer coupon discount benefits. Especially from this Seollal holiday, the discount rate for traditional market consumer coupons will be raised from 20% to 30% (up to 10,000 KRW). Additionally, NongHyup will sell seasonal goods such as cabbage, radish, apples, and pears at prices 20% lower than market prices and offer 50,000 affordable gift sets of apples and pears. Gift sets of Korean beef, pork, and processed livestock products will be available at prices discounted by 15-25% compared to market prices, totaling 260,000 sets.

Regarding the announced measures, a government official explained, "Considering the special circumstances of COVID-19, the focus was on maximizing the scale of support compared to existing holiday measures."