More spending to aid struggling families and firms

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More spending to aid struggling families and firms

The Finance Ministry announced Thursday it will double the amount of money it provides to parents taking a leave of absence from work to care for their children and introduced several new measures to support struggling businesses.

The government on Thursday said it will double the gajokdolbom, which translates to taking care of the family, subsidy from its previous level of 250,000 won ($205) per person to maximum 500,000 won, to cover up to 10 days. With schools shut down across the country following the outbreak of the coronavirus, more families have been taking parental leave from work to take care of children stuck at home.

“We estimate the number of households that will be receiving the subsidy to increase from 90,000 households to 120,000,” Finance Minister Hong Nam-ki said during a government crisis management meeting Thursday. “We have decided to expand the gajokdolbom expenses, as there was a need to strengthen our support of families that have been affected from the extended closing of day care centers and kindergartens while classes are now taught online.”

The gajokdolbom program provides subsidies to family members forced to take leave from work to look after their children or other family members who require care.

The government plans to increase the program’s budget from 21.3 billion won to 52.9 billion won.

Separately, the government has announced plans that would ease the burden on industries that have been affected by the coronavirus outbreak. The proposal includes a 30 percent cut to a tax that is imposed on department stores, retail marts and cultural and exhibition facilities for generating traffic.

The tax is based on a combination of venue size and vehicle counts, and the 30 percent cut is expected to save roughly 120 billion won this year.

The government will also shave 25 percent from fees charged to private businesses to cover the cost of sewer services and nearby roads.

And the airline industry, which has suffered catastrophic losses since the pandemic began, will not be charged for the use of any government-owned facilities this year.

The government is also making more loans available to the sports industry, increasing the total amount from 20 billion won to 50 billion won. The government will also extend for one year the maturity of existing loans totaling 14.5 billion won.

Loans for the agriculture and livestock industry will be increased from 10 billion won to 20 billion won.

Hong also raised concerns with the pandemic’s impact to the job market.

“We’re in a situation where there’s a strong possibility of changes to job [reports], especially regarding temporary contract workers and day-to-day workers whose job situations have become unstable, as well as small businesses, including self-employed people, that have seen sales drop sharply,” Hong said.

He said the government has detected that hiring is slowing down, while the number of people that applied for unemployment benefits last month was significantly larger than a year ago.

“The government has introduced a 150 trillion won support [package] to fight Covid-19,” Hong said. “But among the support measures, our priority has been protecting people and jobs, which are the foundation of average Korean livelihoods.”

He added the government will be focusing on preparing for a major shock to the job markets through four major measures: preventing non-conglomerate companies from cutting employees; unemployment measures that would help workers who have recently lost their jobs; creating new “emergency” jobs in both the public and private sectors; and a livelihood stabilization plan tailored to struggling workers and those who lost their jobs.

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