We have convened this 8th Emergency Economic Council meeting in order to protect the lives of our people who are facing severe economic hardships due to the resurgence of COVID-19. At today’s meeting, we will finalize the fourth supplementary budget proposal to be submitted to the National Assembly. At the same time, we will discuss comprehensive measures to enhance people’s day-to-day living and revive the economy, including means to stabilize their livelihoods in the lead-up to the Chuseok holiday.
The Government has so far held seven Emergency Economic Council meetings. Through these, we have announced unprecedented, unconventional measures one after another to help overcome the COVID-19-triggered economic crisis. We have injected 277 trillion won, a colossal sum of money equivalent to 14 percent of the country’s GDP, to preserve jobs, rescue businesses and support the revitalization of domestic demand and the economy. As a result, Korea is projected to record the fastest economic recovery and the highest growth rate among the OECD member states. International organizations and credit rating agencies regard these as achievements made possible by our Government’s successful epidemic prevention and control as well as bold and swift economic policies through aggressive expansionary fiscal spending.
In the early hours of this morning, the Government succeeded in issuing dollar- and euro-denominated Foreign Exchange Stabilization Fund Bonds valued at US$1.45 billion. The euro-denominated bond is the first government bond with a negative yield issued by a non-European country.The dollar-denominated bond also carries a record-low interest rate. That we can successfully issue foreign exchange equalization bonds with ultra-low and even negative interest rates also attests to international investors’ solid trust in the Korean economy.
However, the unexpected resurgence of COVID-19 is delaying an economic rebound and precipitously curtailing domestic demand, consumption and various other economic activities. Microbusiness owners and the self-employed, devastated by the sharp decline in sales and the burden of rent, are voicing their hardships. Businesses are finding it harder and harder to retain employees, and vulnerable workers are increasingly facing job insecurity. As the mission of the Government is to protect the people’s ordinary lives, we bear a truly heavy sense of responsibility and cannot but devise additional measures.
As an emergency measure, the Government has decided to draw up a fourth supplementary budget in the amount of 7.8 trillion won. This supplementary budget will come in the form of emergency relief payments tailored to specific economic damage and will intensively support the lines of business and the people suffering the most to the fullest extent possible.
First of all, we will focus assistance on those microbusiness owners and the self-employed directly impacted by the resurgence of COVID-19. The core of these customized emergency relief payments, 3.8 trillion won, or about half of the total supplementary budget will be injected to benefit 3.77 million of them. Among this amount, 3.2 trillion won will be distributed to 2.91 million people who own microbusiness or are self-employed, with each receiving cash payments up to a maximum of 2 million won. The Government did everything possible to make these funds available, but the amount may be barely sufficient compared to the damage. Though insufficient, I hope it will help the people endure their difficulties
Next, we will inject additional financial resources to protect jobs, the mainstay of people’s lives. The Government has already distributed 10 trillion won as part of our special job security measures, but we will inject an additional 1.4 trillion won to protect 1.19 million jobs in the face of the ongoing employment crisis. Subsidies will be provided for an extended period of time to help businesses retain employees, and the contract-based self-employed, freelancers and other vulnerable workers will also receive additional emergency job security payments. We will also provide support more meticulously to the vulnerable with low incomes as they are affected even more severely in difficult times. We will significantly ease the relevant requirements so that we can provide emergency subsistence support to as many of the people as possible who desperately need it to maintain their livelihoods. As a result, 880,000 people who have so far remained in blind spots will receive assistance for the first time.
Lastly, we will do what we can, albeit limited, to mitigate the hardships that stem from prolonged contact-free education and social activities. First of all, the Government will assume some of the childcare burdens that parents face. The family-care leave period will be extended for another 10 days, and eligibility for the special support worth 200,000 won per child will be greatly expanded from those under the age of seven to include elementary school students. Consequently, 5.32 million children will benefit. In addition, we have decided to provide all citizens with equal support for telecommunication expenses, considering that the majority has had to sharply increase their contract-free activities in the course of cooperating with the Government’s epidemic prevention and control measures. Although it will not be much, everyone age 13 or older will receive assistance with telecommunication expenses. It is a little comfort offered by the Government and a sincere gesture to the people, who are unable to engage in face-to-face contact and economic activities freely due to COVID-19.
We realize that this supplementary budget cannot provide enough support to those suffering due to COVID-19 and struggling to make a living after having sustained enormous damage. There is no end in sight to the COVID-19 pandemic, and government bonds have to be issued to provide support. Under these circumstances, we have no choice but to maximize the effect with our limited financial resources. I hope that, out of a sense of solidarity, people will understand that this supplementary budget should first be aimed at helping our needier, more vulnerable neighbors.
Quick support is urgent for those in life-or-death situations. I ask the National Assembly to swiftly pass the supplementary budget proposal. I also urge every ministry and agency to start preparing to implement these programs immediately after the Assembly passes our proposal – so as much support as possible can be provided before Chuseok.
Along with the fourth supplementary budget proposal today, we will announce measures to stabilize people’s livelihoods in time for Chuseok. I ask the Government to do its utmost so that those unable to experience the generous spirit of Chuseok due to COVID-19 can have a little more heartwarming holiday. Some of our neighbors are having a harder time – underfed children, the elderly living alone and people with disabilities – and I ask you to look after them in particular so that they are not left behind. I would also like you to pay special attention to those who are suffering and displaced from the torrential rains. To help the farmers and fishermen undergoing tremendous hardships due to the typhoons and downpours, we have also decided to raise the limits on agricultural and fishery gifts stipulated in the Prohibition of Improper Solicitation and Graft Act. Gifts of up to 200,000 won will be allowed just for this Chuseok. I hope that this decision encourages people to purchase more domestic agricultural and fishery products and provide substantive help to farmers and fishermen. Though we are unable to visit in person, I hope gifts of agricultural and fishery goods allow us to still be together with those in our hearts this Chuseok.