OPINION

[Editorial] Half-baked plans

By Korea Herald

Local governments unveil universal welfare plans, but funding uncertain 

  • Published : Oct 30, 2018 - 17:09
  • Updated : Oct 30, 2018 - 17:09

Local governments recently poured out policies to expand free child care and free school lunch provisions.

Seoul Mayor Park Won-soon on Monday unveiled a plan to provide free lunches to students of all private and public schools in the capital from 2021. Currently, only pupils at public elementary and middle schools receive free lunches.

On the same day, Pohang in North Gyeongsang Province announced it would provide free lunches at kindergartens and elementary and middle schools starting next year.

Daejeon on Friday disclosed a plan to bear the entire cost of free lunches at high schools from next year.

Seoul announced a plan Saturday to make all day care centers free of charge starting next year.

Busan disclosed a package of child care steps last week, including shouldering all preschool costs from next year.

Daegu and North Gyeongsang Province on Monday disclosed similar free day care plans, which will take effect from next year.

There are few reasons to oppose free school lunches and free day care. They will lessen the economic burden on low-income families, among other things.

The problem is that huge financial resources are required.

Seoul’s free day care plan is estimated to cost 45 billion won ($39 million) a year. Free lunches for all schools will cost the capital city 700 billion won a year.

Day care expenses will be shared between Seoul and its districts, while the cost of free lunch provision will be shouldered by Seoul Metropolitan Office of Education, Seoul Metropolitan Government and the city’s district offices.

But not all districts are well-to-do. Their fiscal self-reliance ratios average 29.3 percent. The free lunch and day care plans will be more burdensome to those districts that do not have much money.

Busan estimates the costs of its latest day care measures to total 2.45 trillion won up until 2022, but the amount may swell once they are enforced.

The budget is not the only stumbling block.

Some districts in central Seoul reportedly oppose the expansion of free lunches, because more students commuting from other districts will have free lunches.

An equity issue in burden-sharing must be addressed.

It is controversial whether the free lunch program should cover even private elementary schools and international middle schools, which receive relatively expensive tuition fees.

Sketchy funding plans are another problem. Most local governments expect support from the central government and education offices. Late last year, the national average of self-reliance at local governments was 53 percent, with many below 40 percent.

Seoul is much better off than other local governments. Its welfare policies are likely to be benchmarked by other cities and provinces, so unless the central government helps local governments catch up with Seoul, regional inequality will only deepen. Nationwide policy coordination by the central government is needed.

Education Minister Yoo Eun-hae in her inauguration address on Oct. 2 vowed to make high school education free of charge starting next year, a year earlier than planned by the administration of President Moon Jae-in.

But the ministry has not presented funding plans.

Normally, state welfare projects are shared between central and local governments. However, if the ministry pushes ahead with free high school education without a feasible funding plan, conflicts over who should pay for it will be inevitable.

Welfare with ambiguous funding plans will end up as a mirage. Such welfare programs can worsen the public finances and increase the burden on taxpayers.

Most worrisome is that it is not easy to suspend or scale back free welfare, once dispensed. This is why prudence is warranted with regards to welfare policy.

In view of mounting concerns over the Korean economy, policy priorities need to be reviewed.

The latest education welfare plans seem ill-prepared and hasty. The best policy now is to examine the plans carefully from square one, but if that is not easy to do so, the government should work out ways to prevent their side effects.

The right way to expand welfare is to first secure the required funding, and then execute plans within those financial limits.

Also, measures are needed to oversee budget execution to prevent such misappropriations found recently in private kindergartens, which received government fiscal support.