Go back to basics on day care funds

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Go back to basics on day care funds

The Seoul city government has decided to issue 200 billion won ($183 million) in bonds in order to sustain the city’s foundering day care program after it clashed with the central government over funding. But the makeshift measure’s effects will only last a year, and the two governments will likely face another battle if the fundamental financing problem is not resolved.

Worse, the liberal Park Won-soon, Seoul’s mayor, and the conservative administration and ruling party turned the day care program into a political power struggle. The Saenuri Party criticized Mayor Park’s announcement to issue municipal bonds as a “political show” to stir conflict between the central and local governments. It challenged Park to a public debate on the matter. The city government responded sharply that the party has lost its sense of balance and demanded that the National Assembly quickly increase the central government’s funding for the free day care program from the 40 percent it now pays.

Financing problems were inevitable after the National Assembly expanded universal free day care this year to all children under 5 years old from previous age limit of 3. Lawmakers were vying to buy public approbation with welfare benefits that had no basis in fiscal reality. The burden became heavy when both the central and local governments saw sharp reductions in tax revenues amid an economic slowdown.

The city and the central government are missing the point. They blame each other without looking at the real problem - the scope of the day care program is unaffordable.

This controversy has underscored the point that no social benefit is free. If the central government shoulders the cost, it comes from the national tax coffers. If the Seoul city government pays, the money comes from the pockets of Seoul citizens. No matter how politicians try to package it as a “free” social benefit, taxpayers have to pay. Neither government involved wants to face up to that truism.

Free day care has done little to further its professed aim; the Korea Development Institute says it has not increased employment among women and can worsen educational polarization because young children spend so much time in day care centers.

Instead of emotional rhetoric about saving the program no matter what, the city should coolly study its feasibility and sustainability. The program should be redesigned if it is structurally bad and unaffordable; it should not become political football. Stop fighting and reexamine the day care system from scratch.

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