Compensation System, SME Minister Nominee Emphasizes 'Rent Support'

President Moon Identifies Ministry of SMEs and Startups as Main Agency for Loss Compensation System
Candidate Minister Kwon Chil-seung Proposed Loss Compensation Act Centered on Rent Support on the 14th

Minister of SMEs and Startups nominee Kwon Chil-seung is answering questions from reporters as he arrives for his first day at the hearing preparation office set up at the Small and Medium Business Technology Information Promotion Agency in Yeouido, Seoul, on the 22nd. Photo by Kim Hyun-min kimhyun81@

[Asia Economy Reporter Kim Heeyoon] Recent remarks by the nominee for Minister of SMEs and Startups, who was designated by President Moon Jae-in as the key decision-making official for the loss compensation system currently being discussed by the government and political circles to support small business owners and self-employed individuals, are drawing renewed attention.

On the 14th, prior to his nomination as minister, Kwon Chil-seung, the nominee for Minister of SMEs and Startups, proposed through a parliamentary bill that rent support should be provided to small business owners and self-employed individuals struggling due to business restrictions caused by the spread of COVID-19. Kwon, a member of the Democratic Party of Korea, serves on the National Assembly’s Industry, Trade, and Energy Committee.

The significance of Kwon’s proposal is underscored by President Moon’s directive on the 25th to institutionalize a loss compensation system for small business owners and self-employed individuals suffering business damages from COVID-19 quarantine measures, specifically naming the Ministry of SMEs and Startups as the responsible department.

Kwon’s bill aims to amend parts of the Framework Act on the Management of Disasters and Safety. It focuses on having the national and local governments provide partial rent support to business operators when their business premises are closed or restricted due to disaster prevention and response measures. From the time of its proposal, it has been referred to as the “Loss Compensation Act.”

According to Kwon, in Germany, the government supports 90% of small business owners’ rent and labor costs, and in Canada, the rent support for self-employed individuals has recently increased from 50% to 90%, reflecting emergency support policies centered on rent assistance.

Meanwhile, the government has formed an inter-ministerial task force (TF) to institutionalize the loss compensation system and has begun internal practical review work.