Ruling party asks for welfare in extra budgetMore generous parental leaves and extra spending for dementia treatment were two of a few requests by the ruling Democratic Party for a supplementary budget the Moon Jae-in government is drafting.
A wish list for the budget was discussed at a meeting between the Democratic Party and the Ministry of Strategy and Finance at the National Assembly in Yeouido, Seoul, on Wednesday.
Under current regulations, parents who take leaves to raise children receive 40 percent of their monthly salaries with a minimum of 500,000 won ($446.74) and a maximum of 1 million won.
The Democratic Party asked for that ratio to be raised to 80 percent. Parental leave payments are covered by the employment insurance fund under the Ministry of Employment and Labor. The fund is currently managed by the brokerage firm Korea Investment & Securities. An increase in the budget means a larger pool for the insurance fund.
It also asked for higher government subsidies to encourage young workers at small and midsize companies to save.
Under a current program, young workers at small and midsize companies are offered matching funds if they save. If an individual saves 125,000 won every month for two years, the government matches the savings with 6 million won and the company matches it with 3 million won.
Since this program was launched last July, 13,838 people participated as of the end of March, although no one has reached two years of savings yet.
The ruling party asked that the program be expanded by increasing the matching funds.
The Democratic Party is stressing the need to use the budget to create government jobs and enhance Korea’s social safety net and various types of welfare programs, such as raising senior citizen allowances and funding for dementia treatment.
“Timing is always important for a supplementary budget,” said Finance Minister Yoo Il-ho. “And that’s why it is important to always [design the budget] with proposals that can actually be realized.”
The Finance Minister said the government will try to reflect as many of the requests as possible and asked that the ruling party cooperate so that the budget could pass the National Assembly quickly.
During his campaign, Moon promised to create 810,000 jobs in the public sector to alleviate youth unemployment and to create a supplementary budget this year to help fund those jobs.
The Finance Ministry is planning to send the details of the supplementary budget to the National Assembly next week so that it can be voted on and implemented in the second half of the year.
The government and ruling party have stressed that the supplementary budget will be paid for with excess taxes collected last year.
Last year the government collected 242.6 trillion won, 9.8 trillion won more than its initial target of 232.7 trillion won.
The government and ruling party stressed that there will be no additional issuance of government bonds for the extra budget.
However, an easy passage in the National Assembly is not assured as the opposition is against using taxes to create additional jobs in the public sector.
BY LEE HO-JEONG [email@example.com]