September 11, 2020 13:44
The government has announced a fourth supplementary budget of W7.8 trillion to finance coronavirus relief payouts (US$1=W1,188). President Moon Jae-in cited "fiscal difficulties" to explain why this is not being paid to everyone but only those who are hardest hit. But a closer look suggests that the handouts are anything but carefully tailored to those in need but are in fact a bribe for voters. The total number of recipients of one benefit or another stands at 57 million, which is more than the entire population of 51 million. How come? Because millions will qualify for more than one "tailored" handout. This suggest that the tailor's maxim "measure twice, cut once" has been turned on its head.
Offering a one-off discount of W20,000 on mobile phone bills to all citizens over 13 years of age is tantamount to throwing cash at the public. Forty-six million Koreans qualify. The government initially wanted to give the discount only to people of prime working age between 35 and 49, but changed its mind under pressure from the ruling Minjoo Party, which feared that this would be unpopular. That ostensible generosity will cost taxpayers W900 billion.
Moon referred to the phone bill discount as "some small consolation" from the government. But he is claiming credit at the expense of taxpayers. Will he take responsibility in the future for the almost W1 trillion in added fiscal burden to be shouldered by the public? Will he pay for it out of his own pocket? The money for the discount will end up directly in the pockets of big telecoms, nowhere else. The government claims that it will somehow aid citizens whose mobile phone fees have increased in lockdown, but in reality mobile communication spending shrank two percent on-year in the second quarter. This is pure pork-barrel politics.
The Korea Taxpayers Association in a statement accused the government of "irresponsible and unethical" behavior by using future generations as collateral for loans to fund the payouts. Korea's sovereign debt ratio will soar from 36 percent to 46 percent during Moon's single, five-year term, and he has racked up a fiscal debt of W400 trillion. Yet Moon probably thinks that voters will choose the ruling party again in gratitude for its generosity with their money.
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