Ruling and Opposition United on Revising Supplementary Budget... Hong Nam-ki Says "Increasing Funds Not Easy, Must Consider Quarantine Situation"

Situation Changes Due to COVID-19 Resurgence
Need for Increased and Focused Support for Small Business Owners Emerges

Deputy Prime Minister and Minister of Economy and Finance Hong Nam-ki is seen speaking during the third session, "Policies for Economic Recovery," at the G20 Finance Ministers and Central Bank Governors Meeting held on the 10th (local time) at the Arsenale Conference Hall in Venice, Italy. The scene is being broadcast on a monitor. [Image source=Yonhap News]

[Asia Economy Sejong=Reporters Son Seon-hee and Park Jun-i] As the COVID-19 resurgence changes the quarantine situation, the government's 33 trillion won second supplementary budget bill (supplementary budget) submitted to the National Assembly is highly likely to be significantly revised. The government decided to provide disaster relief funds of 250,000 won per person to households in the bottom 80% income bracket, but both ruling and opposition parties are pushing for a reorganization of the supplementary budget, arguing that the compensation fund for small business losses should be increased or that support should be concentrated on sectors severely affected such as small business owners and self-employed individuals. In this situation, Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, said on the 12th, "We need to consider the changed quarantine situation," leaving open the possibility of budget adjustments. However, he also added that "an increase is difficult."

Yoon Ho-jung, floor leader of the Democratic Party of Korea, said at the Supreme Council meeting that day, "We will focus discussions on minimizing the pain of self-employed and small business owners following bold quarantine measures, providing consolation payments to all citizens in a more comfortable way, and revitalizing consumption." Earlier, within the ruling party, former Prime Minister Chung Sye-kyun and lawmaker Park Yong-jin, among presidential candidates, raised the idea of reorganizing the supplementary budget bill, and the possibility of increasing the supplementary budget was also mentioned.

Although there are differences in details, the idea of reorganizing the supplementary budget is also emerging in the opposition. Basically, the focus is on concentrated support for small business owners and the self-employed. Kim Do-eup, policy chief of the People Power Party, said at the Supreme Council meeting, "The second supplementary budget needs to be readjusted as a livelihood supplementary budget that saves the people," and insisted, "Sufficient support should be provided to industries that are in urgent need." Jeon Ju-hye, floor spokesperson for the People Power Party, also demanded through a statement that "the original second supplementary budget was prepared on the premise of COVID-19 stabilization for economic recovery," and called for reorganizing it by reducing the budget for consumption promotion and expanding support for vulnerable groups.

Ahn Cheol-soo, leader of the People Party, also argued, "It should be resolved through sufficient and focused selective support," and said, "The trick of disaster relief funds for 80-90% of the people, exploiting the public's ‘free mentality,’ must be stopped immediately." The day before, former Future United Party (predecessor of the People Power Party) lawmaker Yoo Seung-min also requested the government to "redraft the supplementary budget from scratch and submit it to the National Assembly," and on the 10th, Jeju Governor Won Hee-ryong said, "Disaster relief funds should be approached as survival funds for small business owners and the self-employed rather than as consumption promotion measures for the general public."

Meanwhile, Hong Nam-ki, who is visiting Venice, Italy, to attend the G20 Finance Ministers and Central Bank Governors Meeting, clearly expressed a negative stance on increasing the supplementary budget at a press conference on the 10th (local time), saying, "There are demands from the National Assembly and the quarantine situation has changed, so we need to discuss it, but increasing the supplementary budget is not easy." However, he left room by saying, "The economic authorities also need to consider the changed quarantine situation."