Party and government officials promising benefits to youth, surprised by the Lee Jun-seok syndrome

Measures to Prevent Accelerated 2030 Vote Loss
Income Deduction for Long-Term Youth Fund Subscriptions
Military Savings Deposit Limit Increased by 100,000 Won

[Image source=Yonhap News]

[Asia Economy reporters Jang Se-hee and Moon Chae-seok] The government and the ruling party are planning to launch a youth income deduction long-term fund and expand the deposit limit for military savings accounts to win back the youth vote, which has turned away from them. This move aims to appease the youth with policy support as the youth vote rapidly drifts away following the whirlwind election of Lee Jun-seok as the leader of the People Power Party. The ruling party and government have agreed to include such "youth policies" in the second half economic policy direction (Ha-gyeong-bang) to be announced at the end of this month and the second supplementary budget (Choo-gyeong), and to separately announce a comprehensive youth plan next month.

According to the ruling party and government on the 17th, the government decided to include the launch of the youth income deduction long-term fund and the expansion of the military savings account limit from the current 400,000 won to 500,000 won in the Ha-gyeong-bang. A senior government official said, "We plan to introduce tailored policies related to youth employment, housing, and asset formation," adding, "We will also pursue job creation measures."

The youth fund is designed to support youth asset formation and long-term investment. Youth aged 19 to 39 with an annual total salary of 45 million won or less who subscribe to a domestic stock fund and save for more than 10 years can receive an income deduction of up to 40% of their contributions.

The urgent reason behind the ruling party and government's active promotion of youth policies is the need to regain the youth vote lost before next year's presidential election. Song Young-gil, leader of the Democratic Party of Korea, also mentioned the word "youth" 21 times in his first parliamentary negotiation group leader speech on the 16th, proposing the establishment of a "Youth Special Minister." Song emphasized, "We will change the flawed structure that weighs down the lives of youth," and "We will work hard for a Korea where youth have hope."

However, experts are negative about pouring finances into the youth all at once. They argue that it is more important to strengthen the fundamentals of the economy so that youth have more opportunities for wealth formation. Sung Myung-jae, president of the Korean Fiscal Association and professor of economics at Hongik University, pointed out, "Increasing quality jobs is more urgent than increasing youth seed money," adding, "The difficulty lies not in saving deposits but in the difficulty of finding jobs and rising housing prices."

Meanwhile, the government plans to include a "three-package domestic demand measures" in this year's second supplementary budget, such as selective disaster relief payments, nationwide cashback, and an additional issuance of 5 trillion won in local currency.