Gov't announces grant for business owners as social distancing returns
According to government estimates, 3.2 million business owners will be eligible to receive the grant as part of a 4.3 trillion-won support package for small business owners announced Friday.
Finance Minister Hong Nam-ki said 1 million won will immediately be given to any small business owner once the impact of social distancing measures on their business has been verified.
He said more businesses will be eligible to receive the grants compared to previous handouts, as the government will disregard requirements related to things like the size of the business and previous earnings.
The government said it is adding 1 trillion won to the 2.2 trillion-won budget earmarked for compensating businesses that have suffered heavily from Covid-19 restrictions next year. The government compensation scheme is separate from the 1-million-won handout.
The government compensation scheme targets businesses that were affected by limitations on the number of customers that can be seated at one time, or that had to limit their business hours during the fourth quarter.
The government will offer compensation to cover up to 80 percent of losses when compared to earnings made in the same period in 2019.
The minimum amount of compensation for next year has been raised to 500,000 won from 100,000 won this year.
The government said it plans to also expand the number businesses eligible for compensation to include some that were excluded this year, such as hair salons and kids’ cafes.
The government also plans to spend 100 billion won to provide quarantine-related items such as digital entry lists, thermometers and plastic dividers for restaurant and cafes as part of its implementation of the quarantine pass system.
Business owners have demanded that the government be more aggressive in its support as social distancing regulations are reintroduced.
The Korea Federation of Micro Enterprise in a statement released Thursday after the government retightened social distancing regulations argued that the government is once again asking small businesses that are already on the edge to make sacrifices.
“We can’t hide our disappointment of passing the government’s quarantine responsibility to small businesses once again,” the statement stated. “We demand 100 percent compensation for the strengthened quarantine measures against small businesses, who are once again driven to a critical state.”
The government on Thursday announced new social distancing regulations that limit the number of people at restaurants and cafes to four starting Saturday. Businesses have to close at 9 p.m.
This is the second tightening of social distancing rules since the government started relaxing the regulations in November as a step towards normalcy.
But as the number of people infected with the transmissive virus continued to spike and the number of people dying broke records, the government started to tighten regulations, including limiting the number of people gathering to six in the Seoul metropolitan area and eight elsewhere on Dec. 6.
Democratic Party presidential candidate Lee Jae-myung again demanded that the government create a supplementary budget to provide support to business owners.
“The opposition [People Power] party has officially been arguing for a 50 or 100 trillion won support fund [for small businesses,” Lee said Friday. “The government should take preemptive steps to respect the position of the ruling and opposition parties.”
DP Presidential candidate Lee has been accusing the government of taking a passive approach.
The opposition People Power Party, while proposing offering a minimum 50 trillion-won in support, opposes creating a supplementary budget, which only increases the government’s debt.
The PPP argues that funding for the support should be created by making adjustments to the already supersize 600-trillion-won budget.
The Blue House also opposes the supplementary budget idea.
BY LEE HO-JEONG [email@example.com]