Input 2021.03.02 11:00
The 3rd largest supplementary landscape ever
Disaster subsidies paid to a total of 6.9 million people
48.2% of national debt to GDP after addition
Integrated fiscal deficit of 89.6 trillion won
5 million won each supported for 115,000 businesses that are prohibited from gathering
The government has formulated the first additional correction budget this year worth 1.95 trillion won in order to support the victims of the novel coronavirus infection (Corona 19). By increasing the issuance of deficit government bonds, expenditures will be increased by 15 trillion won, and a fixed budget of about 4.5 trillion won will be invested in this year’s budget.
It is expected that a total of 6.9 million people, including 5.64 million small businessmen, will receive support through this supplementary administration. This is an increase of about 2 million people compared to last year’s third disaster support fund.
It is the third-largest addition in the history of Korea in terms of the amount of expenditure increase (15 trillion won) due to the extra budget. It is the largest since last year’s third supplementary supplement to respond to Corona 19 (approximately 23.7 trillion won in expenditure) and the 2009 global financial crisis supplementary (1.7 trillion won).
The national debt is 965 trillion won, which is about 1,000 trillion won. This is because it plans to issue an additional 9.900 trillion won in deficit treasury bonds to organize an additional budget. This is an increase of 119 trillion won compared to the end of last year (84.89 trillion won). After the addition, the national debt to the gross domestic product (GDP) is 48.2%, an increase of 0.9%P (points) compared to the current budget and 4.3%P compared to the end of last year.
At a state council meeting on the 2nd, the government decided on the ‘2021 supplementary correction budget (second customized damage support measures)’. This supplementary measure is a result of worsening employment due to the prolonged Corona 19 and continuing social distancing for quarantine, resulting in intensifying sales damage to self-employed and small business owners. The supplementary bill, which passed the state council meeting on this day, is expected to be presented to the National Assembly on the 4th.
◇ Total expenditure 573 trillion won… 9 trillion 900 billion won raised as government bonds out of an additional 15 trillion won
A total of 1.95 trillion won is required for this second customized damage support countermeasure. Of these, KRW 4.5 trillion was prepared by changing the purpose of the project and the timing of execution from the already-executed budget. The increase in expenditure is 15 trillion won to 9.9 trillion won, and government bonds are issued, and available financial resources of 5.100 trillion won are added to raise financial resources. Previously, the government paid 14.3 trillion won for the first emergency disaster subsidy for the whole people, and 7.800 billion won and 9.3 trillion won respectively for the second and third rounds, which were selective subsidies for small business owners and the vulnerable to work. wrote.
In this addition, 2.6 trillion won of the available financial resources of 5.100 trillion won will be raised as world surplus, minus expenditures from last year’s revenues. The 2,600 billion won included 1 trillion won in global surplus in special accounts for rural areas such as the stock exchange tax, which increased last year. This means that some of the increased securities transaction tax revenue from the Donghak Ant Movement is used as an additional financial resource. In addition, the available financial resources consist of 1.7 trillion won in surplus funds such as housing funds and 800 billion won in the Bank of Korea surplus.
The consolidated fiscal balance, minus expenditures from gross income, is expected to show a deficit of 8.9 trillion won. Last year, the total fiscal deficit is expected to hit a record-high 84 trillion won, and the record is expected to break the record for the largest fiscal deficit in one year. This year, the deficit will increase by 1.4 trillion won compared to the 75.4 trillion won proposed by the government at the time of this year’s budget. The management fiscal balance, an indicator of fiscal soundness (integrated fiscal balance minus social security funds), is a deficit of 126 trillion won, which will increase the deficit compared to the original budget by 13 trillion won. The ratio of the managed fiscal balance to the gross domestic product (GDP) is -6.3%.
◇Addition of 1.05 million small business owners eligible for support…Pay up to 5 million won
The additional budget will be 8,100 billion won for emergency damage support for small business owners and the underprivileged class, 2.8 trillion won for emergency employment measures, and 4.1 trillion won for quarantine measures. The types of support for small business owners will be expanded to five in this supplement from the existing three criteria, such as collective prohibition, restriction, and general industry, depending on the intensity of the quarantine measures implemented in 2021 and the level of damage by industry.
The unit price of support was set between 1 million and 5 million won, depending on the type of business. The amount paid in accordance with the support criteria is ▲ 5 million won for businesses with extended group bans (11 types such as indoor sports facilities, karaoke, entertainment facilities) ▲ 4 million KRW for businesses with easing group bans (2 types, including academy) ▲ limited group businesses (restaurants, etc.) 10 kinds of cafes, PC cafes, etc.) 3 million won ▲ 2 million won for general business types in crisis (10 types of travel, performances, etc.) ▲ 1 million won for general businesses with reduced sales.
600 billion won was also allocated for employment security support for the underprivileged, such as specially employed workers, freelancers, corporate taxi drivers, and caring service workers. Of the 2.8 trillion won in emergency employment measures, 2.1 trillion won was organized in the name of job creation. The plan is to support the creation of jobs in five major fields, including ▲ digital ▲ culture ▲ quarantine and safety ▲ green, environment ▲ care and education, targeting the three generations of youth, middle-aged, and women.
For 40,000 street vendors (estimated values) managed by local governments, 20 billion won will be invested to support 500,000 won per each location on the premise of business registration. Unmanaged street vendors with livelihood difficulties are supported through temporary livelihood subsidies (500,000 won). However, some are pointing out,’Is it appropriate to include street vendors who are not paying taxes to the current country as a target of support?’ A special work scholarship of 2.5 million won for 5 months is also provided to 10,000 college students who have difficulties due to their parents’ unemployment or closure.
On the 1st, Lee Nak-yeon, the leader of the Democratic Party, said at the party meeting, “It has not been the target of support until now, but there are 2 million new people who have entered this time.” The newly supported classes are street vendors and college students in living-risk furniture. Considering that 3,670,000 people were eligible for the 3rd subsidy payment, the total amount to about 6 million people.
In the case of quarantine measures, 2.7 trillion won was organized as a budget for the purchase and vaccination of the corona vaccine. In addition, 7,000 trillion won will be invested in quarantine response such as diagnosis, quarantine and treatment, and 700 billion won will be invested in compensation for losses in medical institutions.