Ruling and Opposition Parties Propose Bills One After Another... Calls to Utilize Social Solidarity Fund
Prime Minister Jeong Sye-gyun Orders Review of Legalization Measures
On the 14th, in front of the Democratic Party headquarters in Yeouido, Seoul, representatives from gyms, Pilates studios, study cafes, screen golf, and coin karaoke announced the three major joint demands of self-employed business owners regarding the adjustment of restricted business sectors scheduled to be announced on the 16th. Photo by Jinhyung Kang aymsdream@
[Asia Economy Reporters Park Cheol-eung and Kim Hyun-jung] Bills compensating self-employed individuals who suffered losses due to restrictions such as limited business hours with tax funds are pouring in from both ruling and opposition parties. Considering the urgency, the political circle intends to complete legislation during the next extraordinary session of the National Assembly.
In this atmosphere, Prime Minister Chung Sye-kyun officially instructed the Ministry of Economy and Finance on the 21st to review plans for legalization. The key issue is funding. The National Assembly has projected that nearly 25 trillion won per month will be required. Since astronomical funds are needed, there are voices calling for the use of not only supplementary budgets but also the Social Solidarity Fund, which is being promoted as part of the ruling party’s profit-sharing system.
According to the National Assembly on the 21st, about ten bills have been proposed to amend the Infectious Disease Prevention and Management Act to provide grounds for compensation by the central government and local governments to businesses that suffered losses due to gathering bans or restrictions. Since the beginning of this year, five additional bills have been submitted?three from the ruling party and two from the opposition?within just 20 days.
Democratic Party lawmaker Lee Dong-joo recently proposed a separate “Special Act for Relief of Small Business Owners Affected by COVID-19 Infectious Disease.” It includes establishing a Small Business Loss Compensation Committee under the Minister of SMEs and Startups, requiring payment within 30 days after a payment request is received, and provisions for the state or local governments to support rent. Hong Ik-pyo, chairman of the Democratic Party Policy Committee, also participated as a co-sponsor. In a phone interview with Asia Economy, Lee said, “We must handle legislation and budgeting together at the next extraordinary session of the National Assembly. We will create a provisional plan with the lawmakers who proposed the bills and discuss it with the Policy Committee and leadership.”
Since both ruling and opposition parties have submitted bills, legislation is expected to proceed swiftly. The Democratic Party plans to prepare by estimating each business’s sales primarily through credit card payment data, as it will take time to ascertain income based on National Tax Service data. Regarding the expected scale of funds, on the 19th, Democratic Party lawmaker Min Byung-duk presented a forecast at a debate hosted by the party’s internal group “The Better Future,” estimating that 24.7 trillion won would be needed for one month of gathering bans and restrictions.
This is a standard for compensating part of the sales reduced compared to normal years, and even if calculated for four months, the required amount approaches 100 trillion won. Lee said, “This should be distinguished from disaster relief funds and provide actual compensation,” adding, “Although supplementary budgets will inevitably be central, the Social Solidarity Fund currently under discussion should also be utilized as it aims to help the most vulnerable groups.”
The government’s pace has quickened under political pressure. At a Central Disaster and Safety Countermeasures Headquarters meeting held at the Government Seoul Office on the same day, Prime Minister Chung said, “Those who could not operate properly due to following government quarantine standards need appropriate support, and it is time to consider institutionalizing this,” instructing, “The Ministry of Economy and Finance and related ministries should work with the National Assembly to pool wisdom and improve legal systems.”
Democratic Party floor leader Kim Tae-nyeon also said at a policy coordination meeting that day, “Institutionalizing support for small business owners who could not operate due to government guidelines is a fundamental duty of the government and the state,” and “We will promote legislation in close cooperation with the government.” A senior government official said, “Since business losses have occurred for small business owners and self-employed due to social distancing policies, the government is also preparing concrete compensation methods.”
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