'Yoon's Biggest Pledge' Compensation for Self-Employed Losses Stalls... Inside, "There Will Be Talk of 'Reholding the Election'"

President-elect Yoon Suk-yeol is arriving at the office of the 20th Presidential Transition Committee, set up at the Financial Supervisory Service Training Institute in Tongui-dong, Jongno-gu, Seoul, on the 31st. Photo by Hyunmin Kim kimhyun81@

[Asia Economy Reporter Jeong Dong-hoon] The self-employed loss compensation plan, considered the biggest pledge of President-elect Yoon Seok-yeol, is showing signs of stagnation internally, with statements such as "(compensation for accumulated losses due to COVID-19 movement restrictions) is less effective than support measures."

On the 31st, a key official from the Presidential Transition Committee (PTC) said in a phone call with reporters after the 5th meeting of the COVID-19 Emergency Response Special Committee (COVID Special Committee) (2nd Livelihood Economy Subcommittee meeting) the previous day, "There is not much difference between the Moon Jae-in administration and the estimates, compensation, and support methods for losses of the self-employed," and pointed out, "The perception of small business owners who suffered from COVID-19 and are driven to desperate measures such as extreme choices is significantly low."

Inside the COVID Special Committee: "If the meeting were broadcast live, self-employed people would say 'Let's have another election'"

At the COVID Special Committee meeting the previous day, some committee members stated that "support methods are more effective than compensation for small business owners who suffered losses during the COVID-19 period," or that "(self-employed people) should be enabled to re-employ or start new businesses." Although this is a discussion process considering concerns about fiscal soundness, overlapping benefits, and fairness, it implies the possibility that President-elect Yoon's loss compensation plan may be partially adjusted or its direction modified.

Officials who attended the meeting reported that the current perception within the COVID Special Committee is that the loss compensation plan is not much different from the Moon administration's compensation and support methods. Since COVID loss compensation support funds could affect the scale of the second supplementary budget promoted by President-elect Yoon, the PTC, and the People Power Party, disagreements among committee members continue, and there is a possibility that new agendas will be set for further discussion within the committee. Regarding this, a PTC official said, "If self-employed people watch the COVID Special Committee meeting live, they would say 'Let's have the presidential election again,'" expressing strong criticism.

During his candidacy, President-elect Yoon promised to invest 50 trillion won within 100 days of the new government's launch to support small business owners and the self-employed struggling due to COVID-19. The quarantine support fund would provide up to 10 million won, including an additional 6 million won separate from the existing government plan. The loss compensation would cover up to 50 million won, selecting recipients through administrative data held by the National Tax Service and local governments, and half of the compensation would be paid in advance depending on the regulation intensity and damage extent.

Ahn Cheol-soo, the chairman of the transition committee, and members of the COVID-19 Emergency Response Special Committee visited the COVID-19 outpatient treatment center at Seoul Red Cross Hospital in Jongno-gu, Seoul, on the afternoon of the 31st. They discussed the difficulties faced by medical staff and patients with Moon Young-soo, the director of Seoul Red Cross Hospital. Photo by Kim Hyun-min kimhyun81@

Challenges in Securing Funds and Selecting Recipients: What Will Happen to Yoon's Biggest Pledge?

President-elect Yoon's self-employed loss compensation pledge faces several concerns. Detailed plans such as payment methods and recipient selection are insufficient, and if no government bonds are issued to secure funds, budget restructuring will be the only option. The promised maximum compensation amount of 50 million won is lower than the 100 million won cap under the Loss Compensation Act, raising concerns that the support scale per person will not increase but only the number of recipients will expand. Additionally, internal concerns about fiscal soundness due to loss compensation and the resulting large supplementary budget are growing. The members of the Livelihood Economy Subcommittee, which oversees the self-employed loss compensation system within the COVID Special Committee, are mainly from academia and the Ministry of Economy and Finance, so concerns about fiscal soundness are inevitably strong.

The COVID Special Committee explained after the meeting that they agreed to prepare a compensation plan that aligns with President-elect Yoon's pledge while comprehensively considering concerns about overlapping support and fiscal soundness. To prepare a 'complete loss compensation' plan, the committee requested the Ministry of SMEs and Startups and the National Tax Service to accurately measure the losses of small business owners and the self-employed. The Ministry of SMEs and Startups reported to the committee on the loss calculation methods within the loss compensation system and the progress of loss estimation. The National Tax Service agreed to cooperate by providing tax data to the Ministry of SMEs and Startups within this week. Based on this data, the Ministry of SMEs and Startups will estimate detailed loss amounts and report the results to the committee next week.