The Democratic Party of Korea is refocusing its efforts on promoting basic income, a 'key pledge of Lee Jae-myung.' The core idea is to support cash vouchers for the entire population. Amid an agreement between the ruling and opposition parties to request the government to submit a supplementary budget by the end of this month, there is also a strategy to pressure the government to include a budget for cash support amounting to 13 trillion won in the supplementary budget. This is a measure that targets the centrist bloc while considering the traditional support base by advocating a 'growth-first' approach.
A seminar titled 'The Role of Finance Shown by the Recovery Support Fund' was held on the afternoon of the 25th at the National Assembly Building, organized by the National Assembly Basic Society Forum, which includes 13 opposition party lawmakers such as Park Joo-min of the Democratic Party.
The recovery support fund refers to cash support aimed at stimulating domestic demand through a 'universal payment' method. Since the last general election, Lee has been promoting a recovery support fund that provides 250,000 won worth of support to the entire population. The Democratic Party allocated 13.1 trillion won for the 'recovery consumption coupon' in its own supplementary budget announced on the 13th of last month.
The Democratic Party believes that implementing cash support through a universal payment method will invigorate the domestic economy, particularly focusing on small businesses and self-employed individuals. They argue that providing local currency to everyone is more effective in revitalizing the local economy than offering limited cash support to low-income individuals.
At the seminar, Kang Nam-hoon, chairman of the Basic Society Foundation and known as one of Lee's mentors, led the presentation. He is considered Lee's 'basic income teacher' and currently serves as the head of the policy division in the Democratic Party's Basic Society Committee. The day before, he also attended the 'sovereign wealth funds' seminar hosted by the National Assembly Basic Income Research Forum as a chair.
Kang stated, 'The universal recovery support policy delivered through local currency is certain to increase consumption tendencies,' adding, 'Compared to the government's infrastructure expenditure, the effect of increased consumption when local currency is distributed is even greater.' He also mentioned, 'If we only support the bottom 30% of low-income individuals, they are likely to use it for overdue interest and bills, making it difficult to actually spend it in the local economy.' He argued that targeted support would diminish the effect of economic revitalization.
Commissioner Lim Kyu-bin noted, 'The short-term effects of cash support include promoting consumption, revitalizing local economies, and stimulating the economy,' while expressing expectations for long-term economic growth due to human capital formation and increased labor market participation.
Amid prolonged debates in the political arena over universal versus targeted payments, some have suggested leaving the decision to local governments. Kang proposed, 'If there are many opposing views on (cash support), let's delegate it to local governments so that mayors who understand the local economy can decide and provide significant benefits to small businesses.'
This seminar was held while the ruling and opposition parties were engaged in a battle of nerves over the scale and items of the supplementary budget. Earlier, Lee remarked in January, 'If the government and ruling party say they cannot conduct a supplementary budget because of the recovery support fund, then I will give up on the recovery support fund.' On the 19th of last month, he also asked, '(If the government and ruling party absolutely cannot do the consumption coupons, what about using it for job creation and startup support?)'