[Exclusive] Government Promised 10,000 Houses for Low Birthrate... Only 'Barely' 30% Delivered [K Population Strategy]

(22) Low Birthrate Implementation Plan Analysis Report for Low and High Levels
9,500 Houses Provided to Newlywed Couples and Child-Rearing Households?
"Raw Material Prices Are Expensive"... Only 3,000 Houses Supplied
System Overhaul Delayed, Youth Monthly Rent Support at 65% Shortfall
Ultimately, Low Birthrate and Aging Society Policies to Be Reannounced in Q1

Editor's NoteThe key to solving South Korea's population problem lies within companies. A corporate atmosphere that evaluates work regardless of gender and a family-friendly culture are crucial to addressing the K-population issue. While low birth rates result from complex factors, it is important to ensure that workplace burdens do not become obstacles that make people hesitate to have children. Asia Economy will visit companies leading family-friendly policies to identify the factors that enabled stable implementation of these systems and will explore multifaceted solutions with companies facing practical challenges. Through this, we aim to encourage change starting from companies and analyze the government's role in making this possible. We listen to voices emphasizing that company culture and atmosphere that reduce psychological burdens are more critical than financial support, and propose alternatives from various perspectives.

[Exclusive] Government Promised 10,000 Houses for Low Birthrate... Only 'Barely' 30% Delivered [K Population Strategy]

The government’s announcement in 2022 to supply 10,000 housing units as a solution to low birth rates was found to have been achieved only 30%. This is the result of a comprehensive analysis of over 300 related policies by the Low Birthrate and Aging Society Committee. Some projects failed to produce any results due to opposition from budget authorities or the National Assembly, while others showed poor performance due to poorly designed policies. As the practice of announcing low birthrate policies but failing to properly implement them repeated, the government ultimately decided to revise the Basic Plan for Low Birthrate and Aging Society and reissue it in the first quarter of this year.

Asia Economy obtained and confirmed the ‘2022 Policy Implementation Performance Evaluation Results’ report from the Low Birthrate and Aging Society Committee on the 24th, revealing that out of 299 related policies, 23 had performance target achievement rates below 70%. Among these, 10 policies failed to achieve even half of their targets. There were also 10 tasks with low budget execution rates. A total budget of 3.0409 trillion KRW was allocated, but actual spending was 1.7868 trillion KRW, accounting for 58.7% of the total. This information was reported to the National Assembly on the 16th, just before the ruling and opposition parties announced their low birthrate measures.

Low Birthrate Measures Fail One After Another Due to National Assembly Circumstances and Ministry of Economy and Finance Opposition

The underperforming tasks largely included housing support policies from the Ministry of Land, Infrastructure and Transport. The Ministry initially promised to supply 9,500 purchased rental housing units to support newlyweds and families with children but supplied only 3,000 units, or 31.6%. For multi-child families, 1,500 purchased and jeonse rental units were planned, but only 500 units (33.3%) were supplied. The plan was to supply 6,000 medium-sized public rental units, but only 1,000 units (23.3%) were actually executed. Although the Ministry planned to supply 15,000 units this year and 20,000 units by 2025 after achieving the 2022 target, it failed to meet the initial goal.

The Ministry explained that the failure to meet targets was due to the downturn in the real estate market. Rising construction costs and worsening real estate conditions led to low participation from developers. The instability in raw material supply caused delays as projects like medium-sized public rental housing underwent review processes. A Ministry official stated, “While converting other rental policies into integrated public rental housing, environmental impact assessments had to be redone. Coupled with raw material supply instability, this led to poor performance.” The official emphasized, “From this year, the projects are being implemented normally.”

Some policies failed to produce any results due to insufficient consultation with the National Assembly or budget authorities. The Ministry of Health and Welfare announced expanding the ‘National Pension Childbirth Credit’ support, which recognizes a certain period as paid even if insurance premiums are not paid, from the second child to the first child. The Ministry promoted that each child could receive an additional 12 months of National Pension subscription period, but the plan was blocked in the National Assembly. Lawmakers from both ruling and opposition parties, as well as the National Assembly’s Pension Special Committee, held differing views on the support target. The method of covering 70% of the cost from the National Pension Fund due to concerns about fund soundness also became a contentious issue.

A policy to operate specialized counseling centers to promote women’s healthy pregnancy and childbirth was scrapped due to opposition from budget authorities. The Ministry of Health and Welfare argued that women need professional counseling on pregnancy, reproductive diseases, menstruation, and contraception. The Maternal and Child Health Act needed to be amended for this, but the Constitutional Court’s ruling declaring the abortion law unconstitutional delayed related legal revisions. The Ministry of Economy and Finance insisted that without the law’s passage, budget allocation was impossible, resulting in no achievements for the project.

Some policies showed poor results due to sloppy policy design by government ministries. The Ministry of Land, Infrastructure and Transport planned to support monthly rent for 82,000 homeless youth, but only 30,000 (36.6%) benefited. Delays in the Social Security Information System overhaul caused applications, investigations, and payments for the rent support project to be postponed. The Ministry of Employment and Labor intended to provide pre- and post-childbirth salary support to 4,723 artists and special employment workers, but only 463 (9.8%) received benefits. The regulation requiring employment insurance enrollment on the childbirth date was the cause, as it is difficult for these workers to enroll due to the nature of their jobs.

Low Birthrate Measures: Is It Over Once Announced? "Post-Evaluation Must Be Enhanced"

While the government has announced low birthrate measures worth hundreds of trillions of won, the practice of failing to fully implement them has been repeated for a long time, causing birth rates to plummet and increasing the need to address this issue. Experts advise that for low birthrate policies to be effective, they must be refined and continuously monitored even after announcement. Professor Lee Cheol-hee of Seoul National University’s Department of Economics pointed out, “Since low birthrate policies are scattered across multiple ministries, it is quite difficult to allocate or adjust resources midway even if effective alternatives are found. The system for evaluating low birthrate policies also needs to be enhanced, but despite efforts over one to two years, it remains insufficient.”

The Low Birthrate and Aging Society Committee plans to establish a ‘Population Evaluation Center’ to strengthen policy evaluation. The center will check the actual effectiveness of low birthrate tasks. This means evaluating not just “how much of the target was achieved” but “how much it contributed to overcoming low birth rates.” The evaluation results will be fed back into the next year’s plans and budget proposals through a feedback system. The center is scheduled to launch in March and begin full-scale performance evaluations from May.

Meanwhile, the committee will restructure existing low birthrate policies. The current 4th Basic Plan for Low Birthrate and Aging Society is being implemented, but the plan is to select and focus on alternatives with high demand and effectiveness. Policies deemed less relevant to low birthrate will be excluded from the basic plan. Excluded policies will be autonomously pursued by the respective ministries. Whether to maintain each policy will be decided based on the ‘Basic Plan Supplementary Research’ conducted this month. The committee plans to prepare a revised basic plan within the first quarter after consultations with ministries and public hearings.