Populism begets painful reverse

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Populism begets painful reverse

In less than a year of experimentation, the free day care system for infants under the age of two can no longer be sustained due to a lack of budget. This is the best example of how easily social welfare programs can flop and gobble up funds if thorough studies are not conducted prior to implementation. The law requires the central and local governments to each bear half of the cost of subsidizing full-time day care for toddlers across the nation. In the case of the capital, the municipal government of Seoul must foot 80 percent of the bill.

But this cost-sharing was arranged without considering the budgets of local and district governments. Before it recently announced it was bowing out of the plan, Seocho District, an affluent neighborhood in southern Seoul, would have used up its entire allocated budget by next week. Other districts in Seoul also are also fast running out of cash and will have to end the subsidies in the next few months. Other provincial governments are likely to follow suit before year’s end unless they receive fresh funding.

However, the fact that this policy would fall flat was entirely predictable. Last December, the government proposed subsidizing child care for families of the lowest 70 percent of income earners, but during the review process the legislature extended the program to include all households, and the cost naturally shot up. For local governments which have poor revenue bases and depend on funding from the central government, it has proved untenable. In a rare collective push, local governors and mayors protested in March and refused to continue with the program unless the central government offers full subsidies.

Under increased pressure, the government said it will revise the program based on people’s incomes. Kim Dong-yeon, the vice finance minister, questioned the validity of the program if it benefits both poor and rich families. In formulating its policy for the second half, the government said it will favor the needy when allocating budgets for day care and family support programs.

Reversing a public policy in less than a year bodes poorly for the credibility of state governance. It also triggers confusion and unrest in society as mothers are now already used to sending their toddlers to free day care centers. Politicians must accept blame for launching the half-baked program, but the government should have raised objections. Now it must learn its lesson and avoid hasty populist pushes without taking a proper reckoning first.

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