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(News Focus) Bumpy road lies ahead for DP's push for new round of universal stimulus checks

Politics 15:23 June 03, 2021

By Park Boram

SEOUL, June 3 (Yonhap) -- The ruling Democratic Party (DP) is stepping up a drive to distribute a new round of COVID-19 response stimulus checks for all, but a bumpy road lies ahead due to opposition from the rival party and the finance ministry.

The ruling party's leadership and key presidential hopefuls recently joined calls for a second round of stimulus checks to all South Koreans, as the country is struggling to break out of the shadow of the COVID-19 pandemic.

Amid such calls, the government is expected to soon launch consultations with the DP over a new round of supplementary budget to finance the coronavirus response.

But a major tug-of-war is likely to be on the horizon amid growing opposition accusations that the DP-proposed universal stimulus check program is a populist election strategy that will drive up the national debt ratio.

(News Focus) Bumpy road lies ahead for DP's push for new round of universal stimulus checks - 1

The DP's push for disaster relief payments for everyone gained fresh momentum after party floor leader Yun Ho-jung openly floated the possibility of a new round of COVID-19 extra budget during a meeting of the supreme party council last week.

Yun later elaborated on the need for universal COVID-19 relief payments, saying on Tuesday, "The formulation and the passage of a supplementary budget bill that includes disaster relief payments for all nationals are urgent."

According to party sources, the DP is eyeing to distribute the envisioned payments as early as the upcoming summer vacation season or before the extended traditional Chuseok holiday in late September at the latest, so that the payments can buoy economic recovery as the country accelerates its national vaccination campaign.

The Democratic Party's floor leader Rep. Yun Ho-jung (C) speaks during a party meeting on June 3, 2021. (Yonhap)

A day earlier, Gyeonggi Province Gov. Lee Jae-myung, the DP's leading presidential hopeful, also threw his support behind the initiative.

"As (the country) earned additional tax revenues (this year), the extra budget won't be one that is bankrolled with debts. There's no reason to delay," he wrote on his Facebook account.

The envisioned program, if approved, will be the country's second round of COVID-19 stimulus checks benefiting all South Koreans and foreigners residing in the nation after it doled out its first such payments in May last year.

Through the first universal stimulus checks, the country distributed a total of 14.3 trillion won (US$12.85 billion) to all households, or 1 million won per household with four members.

Including them, the country has injected a total of four rounds of COVID-19 relief funds so far, with three of them paid to small business owners and others hit hard by the brunt of the pandemic and antivirus social distancing orders.

But hurdles lie ahead in the ruling party's path to negotiate the universal stimulus payment at the National Assembly, as not only the opposition bloc but reportedly the finance ministry as well are voicing opposition.

The main opposition People Power Party (PPP) immediately denounced the plan as a plot to buy back voters ahead of next year's presidential election, which, it said, will only drive up debt burdens for future generations.

"The reckless debt party by the government (and the DP) may help erase the pain for a fleeting moment, but it will come back as heavy burdens (to young generations having to pay the bills)," PPP spokesperson Kim Ye-ryeong said in a press release Wednesday.

"The makeshift measure by the government and the ruling party seeking to win the election would leave heavy bondage in the minds of the people," she noted.

The benefit program is also likely to run into opposition from within the government as well, with Finance Minister Hong Nam-ki reported to be in favor of targeted relief payments benefiting the underprivileged hit by the pandemic, not payments for all.

This image shows Finance Minister Hong Nam-ki. (Yonhap)

Experts predicted the country may need to raise more than 30 trillion won in extra budget to include a universal stimulus check program in the next round of its COVID-19 relief package. In that case, the country's national debt-to-GDP ratio, currently standing at 48.2 percent, will go further up to over 50 percent.

"It will be undesirable for the government to expand its budget to provide disaster relief funds to all when it comes to the effectiveness of antivirus (social distancing) measures as well as economic stimulus, especially at a time when the Bank of Korea has warned of a rise in the interest rate," Sung Tae-yoon, an economy professor at Yonsei University in Seoul, said.

A store in a university district in Seoul remains closed on March 28, 2021, amid the COVID-19 pandemic.


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