British offer welfare lessons

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British offer welfare lessons

The United Kingdom, a leader in the development of the modern welfare state, has declared an end to its long-cherished concept of a universal welfare system. The British government a few days ago proposed a welfare reform bill aimed at slashing unemployment benefits and child allowances. It decided not to give benefits to those unwilling to work and not to grant child benefits to rich families. It also placed a ceiling on the welfare benefits each family can receive.

The reason for such a remarkable shift is obvious: The economy had deteriorated so much that it cannot sustain its famed welfare privileges any longer. The government imposes one of the world’s heaviest income taxes to support its welfare system and the taxes amount to almost 40 percent of the GDP.

The country’s fiscal position is dire. Its economy is stuck in a severe recession, registering a dismal growth rate of minus five percent in 2009, the worst ever since the Great Depression. The dramatic downturn came from the government’s excessive spending on welfare, together with the moral laxity of the people.

Prime Minister David Cameron had finally declared that the British government will seek to create a social environment in which the people work harder rather than looking for welfare benefits.

Of course, Korea is much different from the U.K. We still have many blind spots in our welfare programs, and the government’s welfare spending needs to be increased.

But we should understand why the British government has decided to put an end to its universal welfare system. That’s because it realized that its welfare system is built on more spending than the government can afford.

In Korea, too, the government’s spending for welfare programs has rapidly increased in the past few years. Its welfare budget grew from 56 trillion won in 2006 to 86 trillion won this year. The number of welfare recipients also rose from 3.94 million in 2006 to more than 10 million now.

The rapidly aging society will also incur an explosive growth in demand for welfare services. If we fail to come up with a sustainable - and efficient - welfare system, we will most likely suffer a serious malaise beyond our control.

Yet some liberal factions, including the opposition parties, are still repeating the slogan demanding a “free” welfare service. Our government’s welfare model should be one that is sustainable and applicable to those willing to work.
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