July 05, 2019 12:37
The number of recipients for public pensions increased by 1 million over the last five years to 5.2 million this March. Public pension payments only started in 2014 with W200,000 a month, which has since risen to W250,000 and will increase to W300,000 by 2021 (US$1=W1,170). Now the government has proposed raising it to W400,000 in 2022, which would boost spending of taxpayers' money from W14 trillion this year to W30 trillion five years from now and an estimated W102 trillion in 2040. The government has not said where it will find the money, but the burden will inevitably fall on the younger generation.
Meanwhile, expanded medical coverage will also drastically boost the tax burden on younger wage earners. The government wants national health insurance to cover around 3,800 medical treatments including MRI and ultrasound scans. But that could tempt doctors go overboard on treatments, which have already cost the National Health Insurance Corporation a W177.8 billion loss last year after seven-straight years of profits. The NHIC stands to lose an estimated W10 trillion out of its total W20 trillion in reserves by the end of President Moon Jae-in's single, five-year term in 2022. The government claims the expanded medical coverage will cause no loss if insurance payments are raised 3.5 percent each year.
Yet the number of wage earners who pay state health insurance continues to shrink while the number of senior citizens who do not is expected to rise from 7.5 million at present to more than 10 million by 2025. Medical costs for one elderly person are more than four times higher than the cost for younger people. That means an increase in the elderly population by 2.5 million is equivalent to an overall population surge of 10 million in terms of the cost burden shouldered by the NHIC. The National Assembly Budget Office forecast that health insurance payouts will rise from W62 trillion last year to more than W100 trillion five years from now. Will the shrinking young population of taxable wage earners be able to handle the rising cost burden? The president has yet to comment on such concerns and is busy boasting about the expanded coverage as if he is paying for it himself.
The welfare promises of the Moon Jae-in administration are coming back to haunt taxpayers. Already the government's drastic minimum-wage hike has increased the cost burden on small business owners, while the mandatory 52-hour cap on the working week has begun to take its toll. Government officials and lawmakers are starting to oppose Moon's attempts to dismantle levees built along major rivers during the Lee Myung-bak administration to prevent flooding. And public-school cafeteria workers have launched a nationwide strike demanding more pay, while postal workers are threatening to walk off their jobs for the first time over similar demands. Toll booth collectors, meanwhile, staged a sit-in protest blocking rush-hour traffic because they want their contracts changed to permanent status. Who will foot the bill for this mess?
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