The ruling and opposition parties passed this year’s fourth extra budget bill, but neglected the principle behind it: that relief programs should be concentrated on those hit the hardest by the recent resurgence of the new coronavirus.
Thankfully, they scaled down a controversial plan to provide a 20,000 won ($17) subsidy for telecom charges to all people aged 13 and older.
The ruling Democratic Party of Korea and the main opposition People Power Party agreed to slash the budget for that program from 920 billion won to 400 billion won. They also narrowed the scope of its recipients, reserving the subsidy for those aged between 16 and 34 and those aged 65 and older.
But complaints popped up from those who were excluded -- those between the ages of 35 and 64.
The subsidy proposed by Democratic Party Chairman Lee Nak-yon stirred controversy from the beginning over its populism.
The government initially considered excluding those aged 35-49, but decided to extend the subsidy to everyone over 13 after discussing the issue with the ruling party. Then that plan changed again in the National Assembly.
The government said it wanted to lessen the burden of telecom expenses, saying this had increased due to a surge in noncontact activities. But data shows that telecom charges decreased 2 percent year-over-year in the second quarter. It seems that the government just wanted to give cash to everyone as it did before the April 15 general elections.
Those nationwide cash payouts under the pretext of “COVID-19 disaster relief” became an important election issue that may have affected voters’ support for the government.
But this time, it could not afford to extend subsidies to everyone. It had no money. It has to fund the extra budget wholly through government borrowing.
President Moon Jae-in described the subsidy in question as “a small consolation that the government offers to the people.” It appeared as if he were including everyone, so those aged 35-64 feel discontented with being left out.
The budget for the subsidy program was reduced to 400 billion won, but it is still burdensome considering that the entire 7.8 trillion won budget is debt to be repaid by taxpayers.
The telecom subsidy program is hardly justifiable as a form of disaster relief. Not only is it funded by debt, but it is also far from urgent. Also, the eligibility criteria were problematic. The selection of recipients based on age, not on income or assets, may be administratively expedient, but it is unreasonable and unfair.
The principle underlying the extra budget became blurred in the negotiation process.
The ruling party agreed to reduce the telecom subsidy in exchange for the main opposition downscaling its demand for free flu vaccinations for all. It is questionable whether they examined the items prudently. The petty subsidy will be of negligible help to those in need of emergency relief. But a flu vaccination program is most effective when an entire population is vaccinated.
The extension of a child care subsidy program for elementary school kids to include middle school students as well borders on pork barreling. Moreover, it is hard to understand why corporate taxi drivers should receive the same support as self-employed taxi owners who drive their own vehicles. It is debatable whether relief funds should have been given even to bars that offer lewd forms of entertainment.
The government has drawn up four extra budgets so far this year. National debt keeps growing. The ratio of debt to the gross domestic product increased from 38.1 percent late last year to 43.9 percent after the fourth extra budget went through.
Moon said in a meeting with his senior secretaries Sept. 7 that “it is fiscally very difficult to give relief to all people.” Kim Sang-jo, Moon’s chief secretary for policy, said Sept. 9 that “unless our fiscal health is properly managed, it will be in danger in the mid- and long terms.”
In this situation, the government must pinch pennies. However, while worrying about the snowballing national debt, it decides to insert nonessential, populist items in its disaster budget. People have to discern those expenditures from true relief.