Help those in needThe government’s fourth budget-based Covid-19 relief package is hastily in the making. It may be rolled out in March or April. The move picked up after President Moon Jae-in on Monday ordered “systematic compensation for businesses hurt by state-imposed virus mitigation measures.” In his address to the National Assembly on Tuesday, ruling Democratic Party (DP) Chairman Lee Nak-yon vowed to hand out the fourth relief either “selectively or universally.” Moon and Lee should address the woes of people whose livelihoods are at stake due to the government’s strict mitigation policy.
However, the relief fund must be based on several conditions so as not to stoke unnecessary suspicion. It must not be aimed to buy votes ahead of the April 7 mayoral by-elections in Seoul and Busan. The DP promised a maximum 1 million won ($897) handout to every household ahead of the April 15 parliamentary elections last year and won a supermajority as a result. If the DP wants to avoid criticism of using the same technique, the funding must be meticulously deployed.
Another worry is weakening fiscal integrity. The DP appears to have little care for the consequences from carefree spending. The Deputy Prime Minister for Economic Affairs and Finance Minister Hong Nam-ki’s protest about the government coffers turning into a piggy bank has been utterly ignored. Although the president has ordered the funding within the budget, the extra spending beyond this year’s budgetary plan would have to be raised through issuing debts. Chairman Lee proposes to draw up “enough” supplementary budget to finance the fourth aid. The scale is said to be more than 20 trillion won, far exceeding the 9.3 trillion won in the third package, the 7.8 trillion won in the second package and the 14.2 trillion won in the first package. This year’s budget was stretched to a new record high of 580 trillion won. The attempt to increase the budget just two months into the year inevitably raises suspicion about the motive.
If another debt-financed relief measure is necessary, it must strictly go to the people in dire need due to mitigation measures and virus spread. Even if it takes time, an efficient and systematic subsidy program should be mapped out to deliver actual effect to help the people in immediate trouble. The U.S. government also covers for the losses of shopkeepers, but does not supply them in such a reckless manner. It studies taxation bases and compares them to sales decreased for aid.
It is still uncertain when the fight against the virus will end. Vaccines are being rolled out, but the threat of mutated strains exists. Ammunition must be saved for a long battle ahead.