A sustainable welfare system

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A sustainable welfare system

There is no disagreement about the idea that our government should increase spending on welfare amid the ever-worsening socioeconomic polarization of our society, especially given that the government spends much less on welfare than most developed countries. For example, the ratio of welfare spending to GDP in this country amounts to one-third of what is spent by other OECD member countries.

The problem is the speed and scope of a budget increase. If it is too fast and broad, the government cannot achieve the more significant goal of a sustainable welfare system. If the government seeks universal welfare for all - as is fervently advocated by the opposition camp - it can hardly provide sufficient aid for those who desperately need welfare services. That’s why we find many loopholes in the methods proposed by the main opposition Democratic Party.

The DP wants to spend 33 trillion won ($30.7 billion) more on welfare to achieve its extravagant goal of providing free school lunches, childcare and medical insurance coverage and cutting college tuition in half. That will require an enormous increase in welfare spending. The welfare budget - approximately 86 trillion won this year - takes up 28 percent of the total government budget of 309 trillion won. If another 33 trillion won were added, welfare spending would amount to 40 percent of the budget.

This is utterly abnormal and would not allow the government to function properly. The DP also argues that it can secure the additional funds without raising taxes. It claims it can do that by eliminating tax cuts for the rich and reducing the scope of nontaxable items, which also sounds extremely unrealistic considering that the DP has so far failed to fulfill pledges for a multitude of regional projects and voted against narrowing the scope of nontaxable items.

The universal welfare system the DP wants would require more than 33 trillion won. For instance, many experts say that free medical insurance would require more than 15 trillion won, even though the DP asserts that 8 trillion won would be enough. Under the circumstances, citizens’ resistance against a tax hike will accelerate almost beyond control.

The important thing is not an ideological battle on the issue but a conscientious effort to first remove the blind spot on the welfare front. Only when the DP understands that can the government seek a sustainable welfare system. We urge opposition lawmakers to keep that in mind, unless it wants to be an irresponsible partner of the government.
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