Prime Minister Kim: "Retroactive Application of Loss Compensation Not Possible Due to Difficulty in Calculating Losses for Each Individual Household"

Economic Sector Government Question
Compensation for Losses to All Individual Businesses
National Finances Cannot Bear the Burden

Prime Minister Kim Boo-kyum is attending the government questioning session on politics, diplomacy, unification, and security held at the National Assembly plenary session on the 22nd, responding to the questions from the members of the assembly. Photo by Yoon Dong-joo doso7@

[Asia Economy Reporter Lee Hyun-joo] Prime Minister Kim Boo-kyum stated on the 23rd that compensation for COVID-19 losses for small business owners and self-employed individuals can only be provided through support measures rather than 'retroactive application.'

During the afternoon's government-related economic questioning session at the National Assembly, when Lee Ju-hwan, a member of the People Power Party, asked, "Why is loss compensation being ignored when there are plans to distribute disaster relief funds nationwide and pay off debt with excess tax revenue?" Kim responded, "It is very difficult to calculate how much loss each household incurred last year or the year before and how much should be compensated," indicating that retroactive application is impossible.

Earlier, when Yang Geum-hee, also from the People Power Party, asked, "Why compensate for losses if the first nuclear power plant is shut down for economic reasons? How can the public accept opposition to retroactive application?" Kim replied, "Since it is impossible to settle compensation by examining each individual business, the method is to estimate the extent of damage by industry. For example, if nightclubs among entertainment establishments were compensated, it would amount to billions of won?would the public accept that?"

Furthermore, when Shin Jeong-hoon of the Democratic Party asked if this meant providing substantial support that is effectively retroactive, Kim said, "We must provide substantial support for the parts that forced businesses to close," but added, "However, from the government's standpoint, it is financially unsustainable to compensate every individual business for their losses."

Regarding industries like travel, which were not subject to business restrictions but suffered due to COVID-19, he said, "We will do our best as much as possible."

Previously, on the 16th, the National Assembly's Industry, Trade, and Small and Medium Venture Business Committee passed the Loss Compensation Act, which does not specify a 'retroactive application' clause. Instead, the supplementary provisions state that 'sufficient support' will be provided for serious damages caused by COVID-19-related measures.