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In shift, president appears open to income-based 'livelihood support' stimulus

Published: 17 Jun. 2025, 17:31 Updated: 17 Jun. 2025, 18:33

President Lee Jae Myung speaks to reporters at a press briefing on a presidential flight en route to the Group of 7 summit in Canada on June 16. [JOINT PRESS CORPS]

President Lee Jae Myung suggested support for a hybrid approach to the upcoming “livelihood support payments,” calling for universal distribution with differentiated amounts based on income — a significant departure from his previous advocacy for a flat-rate payout.

Speaking to reporters aboard the presidential plane en route to the Group of 7 summit in Canada on Monday, Lee said the second supplementary budget should serve both to stimulate consumption and to reinforce household income.

“We need to take both aspects into account. That’s why I’m leaning toward a hybrid approach,” he said.

Lee stressed the need for inclusivity in distributing government aid, especially if the primary goal is to stimulate consumer spending.

“If we focus on boosting consumption, then excluding high-income earners who pay more in taxes could be unfair — almost discriminatory,” he said. "If it’s purely about boosting consumption, then I think equal payments are obviously the right approach."

Still, he acknowledged that the economic difficulties faced by low-income households also require targeted support.

"People are struggling," Lee said. "We also need to address income support. When we emphasize that, it naturally leads to giving more to those in need.”

Lee added that directing funds toward low-income earners could actually prove more effective in spurring demand.

“Lower-income households tend to have a higher marginal propensity to consume, so supporting them might be even more effective in stimulating the economy. If we support high-income earners, there’s a bigger chance the payments would simply replace existing spending.”

The government is reportedly leaning toward a plan that would provide universal payments while allocating larger sums to lower-income groups. However, Lee stopped short of confirming the final plan.

“We’ll need to review a proposal from fiscal authorities and have policy discussions with the ruling party,” he said.

Pedestrians walk by a shop in Seoul on June 16. [YONHAP]

The president’s latest remarks signal a shift from his earlier stance on universal basic income, a policy he once championed as mayor of Seongnam and governor of Gyeonggi. His signature youth basic income program gave all 24-year-olds 1 million won ($734) in regional vouchers, regardless of income.

During the Democratic Party’s 2021 presidential primary, Lee defended the inclusion of wealthy individuals in welfare schemes, arguing that “taxing the rich and only supporting the poor creates a welfare trap.”

Now, he appears to be embracing more targeted assistance. His 2025 presidential campaign notably omitted the basic income pledge.

Lee Han-joo, the architect of Lee’s basic income platform, now leads the State Affairs Planning Advisory Committee rather than serving in the presidential office or Cabinet.

Meanwhile, Kim Yong-beom, a former finance official known for his skepticism toward basic income, was tapped as the senior presidential secretary for economic policy.

Translated from the JoongAng Ilbo using generative AI and edited by Korea JoongAng Daily staff.
BY YOON SUNG-MIN, OH HYUN-SEOK [[email protected]]