How lethargic can a government be?

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How lethargic can a government be?

Published: 04 Jun. 2024, 19:44

Chae Byung-gun
The author is an editor of the JoongAng Ilbo.

Majority Democratic Party (DP) leader Lee Jae-myung is testing the governing People Power Party (PPP) with the bait of a 250,000-won ($181) giveaway per person. After selling the universal handout for a while, he suddenly proposed a selective one last week. The PPP initially balked at the idea. But some are nodding at the suggestion of selective support after the PPP’s crushing defeat in the April 10 parliamentary elections, as if Lee is their leader. No wonder Lee’s party acts as the governing party in place of the staggering PPP.

Lee flashed out the idea of doling out 250,000 won to every citizen just two weeks before the legislative election. His recycling of the winning scheme — which rewarded then-ruling DP a supermajority in the 2020 election during the pandemic period — has triggered a backlash.

To hand out 250,000 won to 50 million Koreans would cost nearly 13 trillion won. How bulky is such fiscal spending? Meal cost for soldiers in this year’s defense budget is set at 1.99 trillion won, about one-seventh of the amount. The Foreign Ministry that operates overseas missions in 167 countries got 4.19 trillion won for this year’s budget, one-third of 13 trillion won.

Despite the astronomical cost of the program, the PPP cannot strongly refute and challenge the all-confident Lee largely due to its defeatism after the election. The PPP barely obtained more than 100 seats in the 300-member legislature against the DP which greatly benefited from its populist platforms.

It is not that the governing party abstained from choosing the populist way. In fact, it set the ground for a populist contest. President Yoon Suk Yeol went on a tour around the country, holding 24 rounds of town hall meetings, from the beginning of the year to March 26. During this streak, he listed government pork-barrel projects as well as trotting out impromptu ideas. For instance, he promised to hand out state scholarships to an additional 500,000 students a year. Awarding 1 million won to 500,000 students would cost an extra 500 billion won. But he didn’t specify where the money would come from.

The DP could not have sat quietly as the president churned out generous offers in the town hall meetings that were held nearly every other day during the final month before the April election. It is how the party came to dig out its winning card in the last parliamentary election four years ago.

The Yoon administration and the PPP are based on conservative roots. A conservative government is traditionally watchful of lavish spending with tax money. It cannot compete against the liberal opposition in fiscal spending. The conservative government finds itself in a conundrum, as it cannot beat the liberal party which prioritizes distribution nor get support from conservative voters.

The PPP’s setback in its pension reform drive also owed to its abdication of responsibility as the governing party to the DP. To save the pension from running out of funds, it should be restructured to collect more and pay out less. But what the public opinion tapping committee under the National Assembly special committee on pension reform chose was to increase the contribution (premium rate) as well as the payout (income replacement rate). The governing front should have persuaded the general public and the committee to accept the idea of paying more and getting less. But the PPP chose to keep silent ahead of the April election.

The government and the PPP cannot defeat the liberal opposition when it comes to tax-money spending. Their approval rating is sinking not because they disagree to a relief check program. They are rapidly losing public favor because the presidential office and the PPP have not endeavored to change and reinvent themselves. Since they are already unpopular, it would be better for them to care for the country’s future even at the risk of losing favor with the public.