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S.Korea plans W7.8tr boost for economy

President Moon Jae-in speaks at the economy meeting on Thursday. (Yonhap)
President Moon Jae-in speaks at the economy meeting on Thursday. (Yonhap)

The government will draw up a 7.8 trillion won ($6.57 billion) supplementary budget bill to shore up the economy in light of the COVID-19 pandemic. Cash subsidies for small businesses are among the items to be covered.

The budget, finalized Thursday at an emergency economic meeting presided over by President Moon Jae-in, would fund 3.2 trillion won worth of subsidies for small-business owners affected by the pandemic, and a one-off 20,000 won subsidy for telecommunications bills for all South Koreans over the age of 13.

“The supplementary budget is tailored emergency aid focusing on the industries and groups mostly heavily affected,” Moon said in announcing the details of the proposal.

“Nearly half of the supplementary budget, 3.8 trillion won, will benefit 3.77 million people. Of this, 3.2 trillion won will be used to provide up to 2 million won in cash to the 2.91 million self-employed, and small-business owners.”

Moon also said that 1.4 trillion won would be directed to programs aimed at protecting jobs in light of worsening employment figures. According to Statistics Korea, August saw the number of employed Koreans fall by 274,000 compared with the same month last year, recording a year-on-year drop for the sixth consecutive month.

“As the employment crisis continues despite the 10 trillion won job security measures that have been rolled out, 1.4 trillion won will be injected to protect 1.19 million jobs,” Moon said.

The plan calls for extending employment subsidies for employers, as well as programs to support freelancers and other workers not covered by employment insurance.

The government’s proposal would also ease the eligibility requirements for subsidies for low-income groups, thereby providing aid to 880,000 additional people.

In addition, eligibility requirements for the 200,000 won child care subsidy would be eased to include households with children in elementary school. Child care leave for employed people would be extended by 10 days.

At the meeting Moon also addressed criticism that the latest measures are insufficient, saying he is aware that the supplementary budget is not enough to fully remedy the situation.

“It was an unavoidable decision in order to maximize the effect with limited funds,” Moon said.

The government has faced criticism over its decision to provide subsidies for selected groups only. An earlier subsidy was provided to all residents.

Regarding the 20,000 won telecom subsidy, Moon called it a “small (token of) consolation and sincerity” from the government toward people who are experiencing economic difficulties.

By Choi He-suk (cheesuk@heraldcorp.com)
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