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(EDITORIAL from Korea Times on Nov. 3)

All News 07:10 November 03, 2021

Populist idea
Candidate Lee hit for proposing more relief grants

Ruling Democratic Party of Korea (DPK) presidential candidate Lee Jae-myung has touched off controversy by proposing an additional provision of relief money to all Koreans. Such a proposal can only be seen as a populist campaign pledge designed to win votes in the upcoming March 9 presidential election.

The controversy erupted last Friday when Lee, the former Gyeonggi Province governor, made the case for extra relief aid to help all Koreans ride out the unprecedented public health crisis. He suggested that an additional 300,000 won ($255) to 500,000 won be offered to each person.

The Moon Jae-in administration has so far provided COVID-19 relief handouts worth 480,000 won to 500,000 won per person on five occasions since the outbreak of the pandemic. But universal payments were only made once. The fifth and last handouts were given to 88 percent of Koreans with the richest 12 percent excluded from the relief program.

Lee floated the idea of providing additional universal relief money so that the total amount can be increased to 1 million won per person. His proposal, if implemented, will require an additional state budget of 15 trillion won to 25 trillion won. This sum could account for 2.6 percent to 4.3 percent of the proposed government budget of 604.4 trillion won for next year.

It would be inevitable to issue state bonds to finance such a large sum; but it is improper to increase the national debt to raise relief funds, given the country's soaring liabilities and budget deficit. The country needs to make efforts to improve its fiscal health as the national debt is predicted to surge to 1,068 trillion won next year from the 660 trillion won recorded in 2017.

The rising debt can be attributed largely to economic stimulus packages and disaster relief programs aimed at cushioning the economic shock from the pandemic. But the Moon administration's fiscal expansion should not be used to pour money into a bottomless pit.

Fiscal means are not limitless. That's why the current administration should focus on providing relief aid to small businesses and the self-employed who are most vulnerable to the fallout from the pandemic. There are also growing calls for fiscal tightening amid inflation fears at home and abroad.

In this context, Lee's proposal for more universal relief is out of touch with reality. It could only be seen as nothing but populism. While serving as Gyeonggi governor, Lee had already came under criticism for doling out 250,000 won to the richest 12 percent in his province who were excluded from the central government's fifth COVID-19 provision of relief funds.

Lee now faces stronger criticism from the main opposition People Power Party (PPP) which has described his proposal as a "vote buying" scheme. The minor progressive Justice Party is also opposed to his idea. Even some lawmakers of the ruling DPK complained that Lee unilaterally announced the proposal without having any consultations with the party. Lee should withdraw such a reckless and unrealistic campaign pledge immediately.
(END)

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