Cabinet and PPP agree on small-business compensation plan

Economy

Published: 11 May. 2022, 16:44 Updated: 11 May. 2022, 19:39

Cabinet and PPP agree on small-business compensation plan

People Power Party floor leader Kwon Seong-dong, left, with Finance Minister Choo Kyoung-ho, during a meeting on the supplementary budget at the National Assembly on Wednesday. The meeting took place just a day after President Yoon Suk-yeol was sworn into office. [YONHAP]

The administration and the president's party have agreed to a small-business compensation plan, which will be delivered to the National Assembly for passage.

Hammered out by the People Power Party (PPP) and the administration, the draft calls for 3.7 million small businesses receiving at least 6 million won ($4,700) each for losses suffered during the pandemic.

The outlays will require a supplementary budget, the size of which is still under discussion.

"We requested at least 6 million won for every small business and SME with annual revenue of less than 3 billion won," said Kwon Seong-dong, PPP floor leader on Wednesday after meeting with Finance Minister Choo Kyung-ho.

"The administration accepted."

The agreement between the president and the PPP, which is the minority party in the National Assembly, comes a day after President Yoon Suk-yeol was sworn into office.

Kwon said each business will receive a different amount but that all eligible businesses will be guaranteed a minimum of 6 million won. The compensation, which is designed to support businesses suffering as a result of the pandemic, will be in addition to any funds disbursed to cover losses related to social-distancing.

The program is a continuation of support from the Moon Jae-in government delivered this year.

The Moon government paid small businesses 1 million won each in January after social distancing rules were re-imposed due to a resurgence of infections. In February, another 3 million won per business was released.

In addition to the 6-million-won payout, the PPP and the administration also agreed to pay businesses 1 million won each to cover losses related to social distancing. They also agreed to release between 750,000 won and 1 million won to 2.25 million vulnerable households.

"During the last presidential race, President Yoon and the PPP promised the self-employed a minimum of 50 trillion won to fully compensate them for losses," Kwon said. "We hope the latest supplementary budget will offer hope and strength for the people to rise again."

The supplementary budget needed to cover the outlays will total about 33 trillion won. When that is added to the 16.9-trillion-won extra budget that passed the National Assembly in late February, the extra budget will total 50 trillion won.

"We have planned the latest supplementary budget with the goal of fully compensating businesses for losses, covering social distancing costs and stabilizing inflation," Choo said.

He stressed that to minimize the issuance of bonds, the government had looked into other resources to finance the budget.

Once the budget is confirmed on Thursday, it will be delivered Friday to the National Assembly, where the Democratic Party holds a clear majority.

Yoon has promised swift action to help self-employed business owners, including those that own restaurants and small coffee shops, as they have made great sacrifices during the pandemic.

BY LEE HO-JEONG [lee.hojeong@joongang.co.kr]