To be fair this is nothing new in modern societies with politicians using welfare handouts to get votes:
The government’s cash handouts as part of welfare benefits will reach a record W33 trillion next year (US$1=W1,130). The cash handouts for people in need have increased by W10 trillion in the two years since President Moon Jae-in came into office, with the total number of recipients reaching 10 million or one out of five citizens.
There are no fewer than 50 different types of welfare benefits ranging from basic pension payments for the 5.39 million elderly people to child benefits for 2.3 million people, living cost subsidies for 1.58 million low-income households and financial support for some 100,000 young jobseekers. Of course the government should provide for the needy, but the current administration’s cash welfare programs are like showering gifts of money on all comers.
In reality they are money for votes. Opposition parties do not want to sit idle and take the blows, and the Liberty Korea Party has already promised to boost next year’s proposed budget by W7 trillion to expand childcare support and others to keep up. [Chosun Ilbo]
Starting this month, basic pension payments will rise and more families will be eligible to receive childcare subsidies.
The Health and Welfare Ministry has increased the monthly basic pension from 200-thousand to 250-thousand won for people 65 and older who fall in the bottom 70 percent income group.
Most families raising a child aged five or younger will also receive 100-thousand won each month from September. For a household of three, combined income will need to be below eleven-point-seven million won a month to be eligible for the benefit.
Those who are eligible for the childcare stipend can apply at local administration offices or at the Web site bokjiro.go.kr. The first payment will be on September 21st.
Monthly benefits for people with serious disabilities will also rise 50-thousand won to as much as 250-thousand. [KBS World]
Minister Park plans to create his welfare state with steep tax hikes:
Health and Welfare Minister Park Neung-hoo speaks during his inauguration ceremony held at the government complex in Sejong, south of Seoul, on July 24, 2017. (Yonhap)
Health and Welfare Minister Park Neung-hoo said Monday he will strengthen the country’s social safety net and establish a foothold for a welfare state for the next five decades.
During his inauguration ceremony held at the government complex in Sejong, south of Seoul, Park said the country should be able to embrace the vulnerable people and become an inclusive society that can bring about growth from all walks of life.
“To make an inclusive welfare state, there should be harmony between a sound market economy and a strong social safety net,” he said, vowing to come up with detailed plans for such a society. [Yonhap]
It is always tough to run against candidates that promise free stuff to the public without the responsibility that goes along with paying for it:
President Park Geun-hye warned against the dangers of populist campaign pledges Friday, stressing that maintaining fiscal soundness is a key factor that the government should take into account in setting its 2017 budget proposal.
“Laws containing populist ideas will burden not only the current generation but the next,” Park said chairing the national fiscal strategy meeting at the presidential office. She added excessive spending on welfare could have an impact on the country’s long-term fiscal health.
The chief executive also advocated special administrative rules like the “pay-go” system. The system makes clear that any additional outlays must be offset by spending cuts or revenue increases.
“The problem of maintaining long-term fiscal soundness is something that is agreed upon by the people,” the president pointed out.
At the meeting that sets government guidelines on spending, the Ministry of Strategy and Finance said it will maintain its expansionary fiscal policy mode for the next five years to prop up the economy. It, however, said every effort is going to be made to cut unnecessary outlays.
The ministry moreover has been moving to streamline the public sector to get rid of overlapping institutions. This can save money and lead to a more efficient fiscal spending structure.
The chief executive’s latest remarks apparently came after the political parties spearheaded different welfare pledges in the lead-up to the April 13 parliamentary elections.
Kim Chong-in, interim chairman of the main opposition Minjoo Party of Korea, stressed the importance of “productive welfare,” saying that the expanded welfare policy will eventually induce growth in related industries, such as health and medical services. [Yonhap]
Swedish royalty is is town giving Welfare advice to President Park:
The heir to the Swedish throne kicked off her official visit to Korea with a meeting with President Park Geun-hye Tuesday, with a focus on sharing knowledge about her country’s welfare policies.
The heir apparent discussed the low birth rate and aging Korean society with the President.
“Sweden set a good example in policies in childcare and balancing between work and family,” Park said.
President Park also paid tribute to Sweden’s participation in the 1950-1953 Korean War.
“The Korean public remembers Sweden played an important role as an ally when security in Korea was at risk,” she said, citing Sweden having been a member of Neutral Nations Supervisory Nations for the past 60 years after the Korean War. [Korea Times]
You can read the rest at the link, but I wonder if the Princess mentioned anything in regards to it being impossible to have a Welfare state and lax immigration policies which is currently straining Sweden’s social harmony.
Here is just another example of how South Korea is following the same road the US has gone down where people want government services without paying more in taxes and politicians keep promising that they can do this:
Civic groups hold a rally after the government scaled down support for pension plans and health care promised during the 2012 presidential election. (Yonhap file photo)
If broader welfare without a tax hike sounds too good to be true in a country where people live longer and give birth to fewer babies in an era of slow economic growth, it probably is.
Taking office two years ago with the promise of more social welfare, President Park Geun-hye said she will dig up the underground economy for tax revenue and eliminate unnecessary spending to finance welfare programs, such as child care, college tuition support and a pension plan for seniors.
So far, the government has done little to show results.
Considered too unrealistic by many economists from the outset, and even questioned by her own party, Park’s welfare goal may be derailed as her administration comes under growing pressure for a tax overhaul to meet growing demand for a better social safety net.
The government came under fire for its clumsily patched year-end tax adjustments that resulted in several tax deductions and other tax breaks being scrapped, diminishing the amount of tax refund for salaried workers and, in some cases, forcing them to cough up more. Officials defended the new system as having been designed to “collect less, return less,” but taxpayers blamed the government for tweaking the tax code to deliberately raise the burden on the middle class.
The government apparently lost the argument. President Park’s popularity rating dipped to a record-low 29 percent last week.
The extra cash from the tax refund may be small in amount, but coming after a sharp surge in tobacco prices and the ongoing push for residential and auto tax increases, the strong resistance forced the finance minister to apologize and the tax office to return part of the taxes retroactively, the first such move.
The tax refund fiasco is just one example of mixed challenges faced by Asia’s fourth-largest economy, which is struggling to strike a balance between a budget shortfall and rising welfare costs from the rapidly increasing elderly population.
Now nearing the midpoint of her single, five-year term, Park needs to make a critical political decision: raise taxes or discard welfare pledges, experts say.
“People were enraged because they felt the government lied about not raising taxes,” Shin Yul, a political science professor of Myongji University, said. “Welfare without tax increase was not a realistic goal from the beginning. If the government does not acknowledge this simple fact and sticks to its oxymoronic pledge, it would result in an early lame duck.”
South Korea’s tax rate is equal to 20 percent of the gross domestic production (GDP), lower than the Organization for Economic Cooperation and Development (OECD) average of 25 percent, while its public welfare budget is just half of the OECD average at 10 percent of the GDP. [Yonhap]
You can read more at the link, but to complete this cycle the next thing politicians will likely do is turn to blaming rich people for not paying their fare share.
The Korean government plans to raise the amount of money spent on Welfare in the country:
South Korea plans to raise its budget for welfare programs by more than 10 percent in 2015 from a year earlier in an effort to establish a better social safety net and revitalize the economy, the government and ruling party said Wednesday.
“The burden for the low-income bracket has been soaring due to the slowed economic recovery,” a Saenuri Party official said. “To ease such agony, we plan to raise the welfare budget by over 10 percent to between 118 trillion won (US$115.12 billion) and 120 trillion won.”
The increased rate for the welfare budget will hover far above the 5 percent rise slated for the combined state expenditure estimated for next year. It will also mark the first time since 2009 that the government has increased the welfare budget at a two-digit rate.
“We plan to push up the economy by lowering the burden for education, living and medical services, and setting up a social safety net, and expand expenditures on health, welfare and employment,” a government official said, adding the finalized plan, including detailed numbers, will be rolled out next week. [Yonhap]
