Guidelines neededGyeonggi has decided to hand out 100,000 won ($80) in cash to each resident regardless of their incomes to help people get through an unprecedented economic crisis from the Covid-19 outbreak. The budget needed for that aid — 1.3 trillion won — will be appropriated from the provincial government’s disaster funds. Following in its footsteps, Seoul, Daejeon and Jeonju in North Jeolla will be offering cash handouts to their residents to help overcome financial hardships. A countless number of part-time workers and daily laborers desperately need the money to survive.
But the public is increasingly confused because some municipalities are offering financial help while others are not. The recipients and amounts also differ among local governments. For instance, Seoul plans to dole out 300,000 to 500,000 won to households whose incomes are less than the median while Daejeon is giving 300,000 to 630,000 won to households whose incomes are between 50 percent and 100 percent of the median income, excluding the lowest income group already receiving subsidies from the central government.
This kind of inconsistent approach is unfortunate given the national impact of the Covid-19 outbreak. With the exceptions of Daegu and North Gyeongsang, where the outbreak was concentrated, all parts of the country are basically suffering the same. Insiders in the ruling Democratic Party are floating the idea of local governments doling out money first and the central government reimbursing them later. If the money comes from people’s taxes, every citizen should receive the same amount.
The Moon Jae-in administration has much to answer for. The central government resorted to one supplementary budget after another — without caring for the poor, who are struggling to survive each day. As a result, local governments rolled up their sleeves to help residents directly. Someone should have set a standard for cash handouts. The government is still sitting on its hands as seen in a critical lack of subsidies for the lower income group.
The central government must set the guidelines for local governments to follow if it really wants to ease public confusion and anxieties. It is not the time to delay such guidelines to meticulously weigh economic effects of the subsidies. Municipalities also must control their impulses toward populism ahead of the April 15 parliamentary elections. Otherwise, it will seriously hurt the fiscal solidity of the country.