[Gwanga in] Heating Cost Support, There Is No More to Squeeze Out

[Asia Economy Sejong=Reporter Dongwoo Lee] Before the announcement of the director-level personnel changes at the Ministry of Economy and Finance on the 10th, rumors circulated that there would be a drastic personnel reshuffle in the Budget Office, which is responsible for managing the national finances. The rumor suggested that the Presidential Office might be exerting influence to support the middle class amid the 'heating cost bomb.' Regardless of the truth of this, it reflects how deeply the Ministry of Economy and Finance has been struggling between the public sentiment boiling over heating cost increases and the government's support policies.

The issue began when President Yoon Seok-yeol ordered related ministries on the 30th of last month to review heating cost support measures extending to the middle class. In response, government ministries announced a heating cost discount support plan worth about 590,000 KRW for basic livelihood security recipients and near-poverty groups earlier this month, but the middle class was excluded from the target. The Ministry of Economy and Finance's position is that expanding support to the middle class would be difficult to bear due to the fiscal burden amounting to trillions of won.

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho has also publicly stated that there will be no additional fiscal support for heating cost assistance to the middle class. Deputy Prime Minister Choo clearly said, "Raising public utility fees and then supporting them with government finances is like 'Josam-mosa (morning three, evening four)'," meaning it is a futile effort. Providing widespread cash support to the public for heating costs is neither a straightforward nor the right approach.

The problem is that the impact of the heating cost bomb is not subsiding easily. It is also a burden for the Ministry of Economy and Finance that the government and political circles share a consensus on the need to prepare additional support measures to appease public sentiment. This is why the Ministry of Economy and Finance recently started 'wringing out a dry towel' for livelihood support. However, the situation is not easy. There are clear limits to livelihood support without additional financial resources.

Looking at the cards recently played by the Ministry of Economy and Finance, this fact is clearly revealed. One of these is the 'Energy Cashback' system, which has had low participation rates so far. This system literally refunds costs according to the amount of energy consumption reduced, making it a clever way to alleviate household burdens without providing cash support to the middle class. However, the actual application period of the improved system (gas usage reduction criteria lowered from 7% to 3%) will only be possible from the next winter season (December this year to March next year), which is far from the current heating cost bomb measures, making it merely a 'token gesture' as an immediate measure to reduce household burdens.

It seems difficult even within the Ministry of Economy and Finance to come up with additional effective support measures. Considering fiscal constraints, it is impossible to increase the scale of direct support, and ultimately, there is a limit that forces a shift to measures that induce reduced usage. An official from the ministry lamented, "Considering the relief of the burden on the low-income economy and price stabilization, it is quite difficult to prepare policies that satisfy everyone."

Deputy Prime Minister for Economy Choo Kyung-ho is attending the 'Emergency Economic Ministers' Meeting and Export Investment Measures Meeting' held at the Government Seoul Office Building on the 16th. Photo by Dongju Yoon doso7@