[Politics X-File] The Billion-Won Subsidy Mind Game to Unfold on February 15 Next Year

(44) February in the Year of the General Election, Behind the Scenes of Gyeongsang Subsidies
Number of Seats as of Central Election Commission Payment Standard Date is Crucial
Party Seat Reduction Variable if Proportional Representative Leaves Party

Editor's Note‘Political X-File’ is a series that delivers the ‘unprecedented stories’ recorded in the election results and incidents of Korean politics.

One indispensable factor that moves politics is money. This is not about illegal political funds or ‘black money.’ Money is necessary for party activities and operations. Various expenses require money, including office maintenance, party operating costs, various personnel expenses, policy preparation, and promotional costs such as placards.

It is true that a political party is a political organization formed by like-minded people, but it cannot be run by goodwill alone. In real politics, there are wealthy parties and poor parties. Wealthy parties are those that have secured many members who pay party dues and have secured many seats in the National Assembly.

The National Election Commission distributes operating subsidies to each party quarterly every year. Large sums exceeding 10 billion won are paid quarterly to various parties for operating expenses and more. The payment of operating subsidies by the National Election Commission is stipulated in the Political Funds Act.

The 19th National Assembly member badge (left) and the current member badge changed to Hangul after 50 years.

Operating subsidies are paid based on the 15th of February, May, August, and November. If the 15th is a holiday, the payment reference date changes accordingly.

The National Election Commission explained, “When distributing subsidies, according to Article 27 of the Political Funds Act, 50% of the total amount is equally distributed to parties that have formed a negotiating group with members from the same party, and 5% of the total amount is distributed to parties with 5 to less than 20 seats.”

Additionally, “For parties with no seats or fewer than 5 seats that meet certain requirements such as the vote ratio in the 21st National Assembly election, 2% of the total amount is distributed,” it added.

Simply put, negotiating group parties with 20 or more seats in the Assembly receive relatively large operating subsidies. Parties with 5 or more seats also receive considerable benefits. Parties with no seats or fewer than 5 seats receive operating subsidies based on the number of votes in the previous National Assembly election.

The remaining amount after such distribution is paid according to the party’s seat ratio and the vote ratio in the last general election.

On March 31, 2020, at the Mirae Korea Party headquarters in Yeouido, Yeongdeungpo-gu, Seoul, Representative Won Yoo-chul, the election committee chairman, and candidates are taking a commemorative photo at the launch ceremony of the 21st National Assembly election campaign committee. [Image source=Yonhap News]

The issue of operating subsidies from the National Election Commission draws particular attention in election years. In years with general elections, new parties are formed, and existing party members frequently change their party affiliation. At this time, the amount of operating subsidies paid depends on which party the member belongs to as of February 15.

For example, in 2020, based on February 14 (February 15 was a Saturday), the National Election Commission paid operating subsidies totaling 11 billion won to 10 parties.

The Democratic Party of Korea and the Liberty Korea Party (predecessor of the People Power Party) each received operating subsidies in the 3.6 billion won range. The Bareunmirae Party received about 870 million won, the Alternative New Party and the New Conservative Party received about 580 million won each. The Justice Party received 630 million won, and the Future Korea Party received about 570 million won.

An interesting point is that the Future Korea Party’s operating subsidy payment increased by about 300 million won as it reached 5 seats with the entry of Jeong Un-cheon, a member of the New Conservative Party. Although only one member was added to the Future Korea Party, it was like a timely rain of operating subsidies in preparation for the general election.

The National Assembly Building / Photo by Dongju Yoon doso7@

The 22nd general election next April will also focus on the number of party seats as of February 15. In the opposition parties, the issue of some proportional representation members being expelled is controversial, but from the party’s perspective, it seems unlikely they will choose expulsion before February 15 next year.

If a proportional representation member leaves the party, they lose their seat, but if they are expelled, they can maintain their status as a member of the National Assembly. From the party’s perspective, if a member leaves voluntarily, the total number of seats is maintained, but if expelled, the number of seats decreases by one. The amount of operating subsidies also decreases accordingly.

As in the case of the 21st general election in 2020, the fate of one member can move several hundred million won in operating subsidies.

The operating subsidy game of cat and mouse between ruling and opposition parties ahead of February 15 next year is expected to be another interesting point to watch.