(Yonhap)
A day after the parliament endorsed a 11.7-trillion-won supplementary budget, the ruling Democratic Party on Wednesday started official preparations for another extra budget, as the country fights a double whammy of a deadly virus and economic recession.
It also said it was desirable that some local governments were seeking to provide something similar to basic income for disaster relief.
“What the local governments are doing can help the central government prepare,” Lee Nak-yon, chief of the DP’s committee on COVID-19 response, said after a meeting with top government officials, including the presidential office.
“We welcome the local governments’ decisions, and expect discussions and decisions to be made during the emergency meeting presided over by the president tomorrow.”
Governors of South Gyeongsang Province and Gyeonggi Province have proposed providing cash to help people tackle the pandemic.
The Seoul City said Wednesday it will provide up to 500,000 won to nearly 1.18 million households that earn less than the median income and are not eligible for financial support from the extra budget.
Lee said there was conversation with the assumption that there will be a second supplementary budget during Wednesday’s meeting, although the timing was not discussed.
Government officials said the central government could use another extra budget to support local government if necessary, when they make the indiscriminate cash payouts, according to Lee.
About whether the anti-disaster basic income will be included in the second extra budget, Lee said he is doubtful the basic income plan can be implemented so quickly.
“The latest developments in the COVID-19 situation have not fully been reflected in the extra budget. The party and the government must promptly come up with additional countermeasures and consider a second supplementary budget,” Lee said.
President Moon said during the Cabinet meeting on Tuesday said that the extra budget was “not the end, but a beginning.”
The ruling party is more vocal about a second extra budget.
Democratic Party spokesperson Chung Choon-sook said on Tuesday that a second supplementary budget may be necessary.
“Opposition parties say we’re throwing cash with the emergency welfare project -- support for small business owners and child subsidies -- but we need to throw cash now,” she told reporters.
Rep. Kim Jung-woo, the ruling party representative on the parliamentary financial committee, told Yonhap News that the latest extra budget could be a drop in the bucket as it was drawn up before the COVID-19 became a pandemic.
“We need to bear in mind the possibility of even a global economic crisis, and build a new framework to save the economy,” Kim said.
Rep. Yoo Seung-hee of the Democratic Party said during a meeting of the parliamentary financial committee on Tuesday that a universal basic income should be provided as selective payouts would leave blind spots.
The Finance Ministry, however, is negative about a second extra budget and anti-disaster basic income.
Finance Minister Hong Nam-ki said it was too early to talk about a second supplementary budget, and the government can always come up with additional measures to minimize the fallout.
About the basic income, Hong said the financial resources were limited, and it was questionable whether a universal basic income would be efficient.
On Tuesday, the National Assembly passed a 11.7-trillion-won supplementary budget bill to contain the novel coronavirus and minimize its economic fallout.
The bill passed through the parliament’s plenary session 12 days after it was submitted on March 5 as 222 of the 225 lawmakers present voted in favor of it. One voted against the bill, and two abstained.
While maintaining the overall size of the extra budget as the government proposed, the parliament cut some expenditures unrelated to the pandemic by 680 billion won, and reduced the tax revenue supplement by 2.4 trillion won, from 3.2 trillion won.
This led to about 3.1 trillion won in additional expenditure, 1.4 trillion won of which will be spent to support Daegu and North Gyeongsang Province, the areas hardest-hit by COVID-19.
Of the total extra budget, an estimated 2.4 trillion won will go to Daegu and North Gyeongsang.
The budget to support small business owners and the self-employed has also been increased by 1.16 trillion won.
By Kim So-hyun (
sophie@heraldcorp.com)