President Lee Jae-myung convened a Cabinet meeting and approved a 15.2 trillion won (RM47bil) budget allocation for a handout of cash-equivalent vouchers to all South Koreans to boost consumption amid growing recession fears.
The move came just hours after Lee returned from a three-day trip to Canada.
The liberal president reviewed the spending package, which the government says is aimed at reviving the sluggish consumer demand that has left many small business owners on the brink of collapse.
“Now is the time to use the state budget, given the gravity of the pain ordinary people are suffering,” Lee said during the meeting on Thursday.
Stressing a pressing need to stimulate the national economy, Lee said, “If you spend money for some reason, I think the benefits should at least be enjoyed fairly by the people.”
The one-off universal cash-equivalent payout will amount to at least 150,000 won (RM465) to all South Koreans.
Those who cannot afford basic living expenses due to extreme poverty and inability to get a job would be eligible for 400,000 won (RM1,240), while those categorised as “near poor” in South Korea will receive 300,000 won (RM930).
In addition to the above, people in the bottom 90% of the income bracket will each receive an additional 100,000 won (RM310).
Second Vice-Finance Minister Lim Ki-keun estimated some 13 trillion won (RM40bil) in consumption was anticipated.
However, the country’s move to dole out a universal cash handout to all Koreans regardless of age, gender and income level has triggered criticism.
Ho Jun-seok, spokesperson of the conservative opposition People Power Party, said on Thursday that the cash handout scheme “sparks criticism that Lee was rewarding (voters) for the election victory.”
Ho also expressed concerns that such a universal payout scheme could lead to the birth of populism in South Korea.
“A supplementary budget to boost the economy would be necessary, but it is uncertain that spreading money to people could lead to an economic rebound,” Ho said.
Asked whether the scheme would cover foreign nationals in Korea, a Finance Ministry official said, “Foreigners are not currently included, but exceptions could be made through task force discussions. The specific recipients will be finalised through those discussions.”
Thursday’s budget proposal, as part of the 30.5 trillion won (RM94.6bil) supplementary budget, will be submitted to the National Assembly for final approval tomorrow. — The Korea Herald/ANN
