[News Terms] Nationwide 250,000 Won Support Fund Debate Ahead of Chuseok

Lee Jae-myung, leader of the Democratic Party of Korea, is facing heated political debate over the '250,000 KRW Livelihood Recovery Support Fund for All Citizens' that he proposed as a pledge in the last general election.

Lee's election pledge for the Livelihood Recovery Support Fund involves providing all citizens with regional currency worth 250,000 KRW. The Democratic Party expects this to stimulate consumption and revitalize the local economy. However, the government and ruling party oppose it, calling it 'cash handouts,' and even within the opposition party, there are opinions that 'selective support' is necessary rather than 'universal support' for all citizens, drawing attention.

[Image source=Yonhap News]

Cash-type support payments to all citizens were previously implemented in May 2020 during the COVID-19 pandemic in the form of 'Emergency Disaster Relief Funds.'

At that time, the Democratic Party also pledged to provide 1 million KRW per four-person household ahead of the 2020 general election. Despite criticism of populism, they pushed for universal expansion under the pretext of 'reviving the livelihood economy on the brink,' spending 14.3 trillion KRW for 22.16 million households nationwide. However, the effect was found to be minimal.

According to the Korea Development Institute (KDI) report titled 'Effects and Implications of the First COVID-19 Emergency Disaster Relief Fund Policy,' the increase in card sales due to the disaster relief fund was about 4 trillion KRW, which accounted for only 26.2?36.1% of the government’s input budget.

The government and ruling party oppose such support funds for all citizens, calling them 'cash handout laws.' On the 2nd of last month, the Democratic Party passed the '250,000 KRW Livelihood Recovery Support Fund Act (Special Measures Act on the Payment of Livelihood Recovery Support Funds)' unilaterally at the National Assembly plenary session, but President Yoon Suk-yeol exercised his veto (reconsideration request right) on the 16th. The Democratic Party plans to push for a re-vote at the plenary session on the 26th.

However, there are disagreements within the party over 'universal support' versus 'selective support,' so the debate over the 250,000 KRW support fund for all citizens is expected to continue ahead of Chuseok.

Kim Dong-yeon, governor of Gyeonggi Province and member of the Democratic Party, stated on the 11th regarding the '250,000 KRW Livelihood Support Fund for All Citizens,' "Instead of all citizens, let's provide it to the middle class and low-income groups excluding the top 20% or 30%." On that day, Kim said on MBC radio, "Rather than providing 250,000 KRW to all citizens, it is more effective in many ways to provide detailed support to the difficult and struggling groups." Earlier, Kim appeared on the YouTube channel Sampro TV and said, "When universal disaster relief funds were given, the connection to consumption was not high," expressing a stance contrary to the party’s claim that such universal support for all citizens could be a policy to increase sales for self-employed people and revitalize the economy.