Relief grants without principleUpon a flood of complaints from the people excluded from the state handout of 250,000 won ($214) per person in the first week of relief grants, the government and ruling Democratic Party (DP) have decided to raise the threshold for the payout from the lower 88 percent income brackets to 90 percent. The payout has been criticized as feudal class stratification by basing the Covid-19 relief grants on their income level. Extra payout to the 1 million people in the wealthier group would cost an additional 300 billion won from state coffers.
The sudden improvisation and amendment to the scheme that had been decided after a lengthy wrangling among the political parties and government is not appropriate. The government caused the problem by ignoring the warning on the risk of dividing the population into 88 percent and 12 percent for the handouts. It pressed ahead with the plan despite the obvious controversy.
The government initially had proposed to hand out the money to the lower 80 percent income group in early July. Then it compromised to the 88 percent and 250,000 won per head upon pressure from the DP — and after Gyeonggi Gov. Lee Jae-myung went his own way, paying out grants to every resident in his province. Although the threshold was raised, the guideline for deciding who fit in the lower 88 percent group was controversial. The government based the income reference on the 2019 health insurance premium level, and problems arose. Some shopkeepers and businesses who had been hard hit by business restrictions for social distancing were excluded whereas the better-off became eligible. The relief fund lost the justice of its cause.
Hong Nam-ki, deputy prime minister for economic affairs, fueled the confusion. He said that if the criteria was too questionable, the government could consider giving the money to as many as possible. DP policy head Park Wan-joo also mentioned that the extra relief could go to those on the “boundary.” How easily they think they can freely dig into the tax coffers is outrageous.
The ruling front is merely trying to calm public complaints. No matter how many more it goes on adding, controversy will rise unless the money is handed out to everyone. It may end up with the same universal handout as the DP originally hoped. The move can only be populist to buy votes in the next presidential election with a 250,000 won check while many self-employed are going out of business and experiencing difficulties due to forced social distancing rules.