Lee Jae-myung: "Universal Basic Income of 1 Million KRW per Year and 2 Million KRW for Youth"

Second Policy Pledge Announcement... Presented Basic Income Framework
"Due to Financial Constraints, Monthly 500,000 Won May Not Be Reached Within Next Government's Term
But Payment Will Be Made Through Fiscal Structural Reform"
Plan to Pay with Time-Limited Local Currency... Basic Income Expansion
Support Preparation Plans Also Detailed According to Timing

[Image source=Yonhap News]

[Asia Economy Reporter Koo Chae-eun] Lee Jae-myung, Governor of Gyeonggi Province, has unveiled the framework of a ‘basic income pledge’ to provide 1 million KRW annually to all citizens and 2 million KRW annually to youth during the next government’s term.

At a second policy pledge press conference held at the National Assembly press room on the 22nd, Governor Lee stated, "Due to financial constraints, it will not be possible to reach the final target amount of basic income (500,000 KRW per month) within the next government’s term. However, through fiscal structural reform, it will be possible to implement youth basic income of 1 million KRW annually and universal basic income of 1 million KRW annually for all citizens." The plan is to pay the basic income in time-limited local currency. This is intended to stimulate the local economy by restricting usage to businesses below a certain scale within the region during a set period.

The youth basic income for those aged 19 to 29 is set at 1 million KRW per person annually, with payments starting in 2023. According to this pledge, youth will receive 1.25 million KRW in 2023 (250,000 KRW universal basic income + 1 million KRW youth basic income). If the universal basic income payment increases to 1 million KRW annually during the term, youth will receive a total of 2 million KRW in basic income. Governor Lee explained the rationale for the introduction, saying, "Youth who previously had to work part-time jobs to cover living expenses will have more time for study and self-development, allowing them to prepare for and dream about their future." Lee previously implemented a youth dividend policy in 2016 during his tenure as mayor of Seongnam, and since 2019, Gyeonggi Province has been implementing a policy providing 1 million KRW annually in local currency to 24-year-old youth as youth basic income.

The funding plan is segmented according to the timing of the basic income expansion. For the short term, when 250,000 KRW is paid annually, Governor Lee estimates that 25 trillion KRW can be secured through fiscal structural reform, budget cuts, and budget prioritization. As the payment amount increases, an additional 25 trillion KRW will be secured from tax reductions amounting to 60 trillion KRW annually. In the long term, basic income land tax and basic income carbon tax will be levied as funding sources.

Governor Lee explained, "If all collected taxes are distributed equally to the people, 80-90% of citizens will receive more basic income than the taxes they pay, which reduces tax resistance and alleviates polarization." Regarding the carbon tax, he said, "If raised to 80,000 KRW per ton according to international organization recommendations, it would generate 64 trillion KRW. Some of these funds will be used to support industrial transition, and some will be distributed equally to citizens facing price increases, creating a combined effect." He also predicted that once the effectiveness of the basic income policy is proven and a national consensus is established, the introduction of a general basic income earmarked tax could be possible in the subsequent government.