Extra budget passes, small business to get a boost

Home > Business > Economy

print dictionary print

Extra budget passes, small business to get a boost

 
Law makers passing this year's first supplementary budget at the National Assembly on March 25. [YONHAP]

Law makers passing this year's first supplementary budget at the National Assembly on March 25. [YONHAP]

 
Mr. Choi, a 51 year-old operator of a restaurant in Seoul's southern Gangnam district, was happy with the news of yet another government supplementary budget -- which contains relief measures for small businessmen like himself.  
 
“It’s a relief,” said Choi, whose restaurant has been badly affected by the social distancing measures implemented since late November.  
 
“I wasn’t eligible for the last emergency relief grants as my business grossed more than 400 million won ($352,000) the previous year.”  
 
Choi said he isn’t fully satisfied with the amount he was receiving, but it was better than nothing.  
 
The fourth round of emergency relief grants go to neighborhood stores and restaurants with annual revenues below 1 billion won. The grants were raised from a maximum 3 million won per businesses in previous rounds to 5 million won. 
 
On Thursday, the National Assembly passed a 14.9 trillion won supplementary budget that included 7.3 trillion won in emergency relief grants for small businesses.  
 
The vote came 21 days after the government turned over the budget bill to the assembly.  
 
It passed with landslide support: 242 in favor, six opposed and 11 members abstaining.  
 
It was the first supplementary budget for this year and the fifth since the Covid-19 pandemic started.  
 
Under the approved budget, 56 percent was taken up by 8.4 trillion won in funding of the emergency relief grants for small businesses and for some other groups like low-income households.
 
Some 2.5 trillion won will be spent on 500,000 to 1 million won allowances for people working in unstable jobs such as freelancers and door-to-door sales person. The remaining 4.2 trillion won will be used for pandemic measures including buying Covid-19 vaccines. 


However, lawmakers agreed to cut the budget for interest payments on government treasuries by 200 billion won, bringing the supplementary budget to 14.9 trillion won. 
 
One of the biggest change from the original government proposal for the budget was a boosting of the emergency relief grants for small businesses.  
 
The ruling Democratic Party and opposition People Power Party agreed on the need to give more help to businesses struggling with the social distancing measures.  
 
The budget for supporting small businesses was raised from the 6.9 trillion won proposed by the government to 7.3 trillion won.  
 
Emergency grants to travel agencies were raised from 2 million won each to 3 million won. Grants for theatrical performance companies were raised from 2 million won to 2.5 million won.  
 
Reductions were made to some proposals by the government, including for government job programs that were deemed less urgent, such as sorting products for recycling.  
 
The supplementary budget was part of a 20.7 trillion won stimulus package. The other 5.8 trillion won will be funded separately from the bill passed Thursday. The stimulus package was increased from an initial 19.5 trillion won announced by the government earlier this month.  
 
“While there was an adjustment, [the extra budget] was confirmed around 15 trillion won as proposed by the government,” said Finance Minister Hong Nam-ki via Facebook on Thursday. “Hopes of returning to normality and an economic recovery are growing.”  
 
Hong said the government will try to hand out the grants to 70 percent of eligible small businesses by early April, or 2.7 million businesses out of 3.85 million that will eventually receive them. It will try to distribute the one-time allowances of up to 1 million won to 88 percent of the 800,000 people with unstable jobs by early April as well. 
 
The goal is to send out the checks before the mayoral by-elections in Seoul and Busan on April 7.  
 
 
BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]  
 
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now