South Korea approves US$46-billion budget to help COVID-hit businesses

The Cabinet has endorsed the supplementary budget worth 59.4 trillion won (US$46 billion) in its first meeting under the Yoon Suk-yeol administration.
By: | May 17, 2022
Topics: Compensation and Benefits | Health and Wellness | News | South Korea

The budget, drawn up by a group of ministries, is mostly aimed at supporting the self-employed and microbusiness owners.

But the real scale of the extra budget in terms of utilisation for payouts for the people and other segments of the economy would stay at 36.4 trillion won (US$28.4 billion), given that 23 trillion won (US$17.9 billion) would be granted to local governments under relevant laws, according to the Ministry of Economy and Finance.

The ministry said that 59.4 trillion won (US$46.3 billion) has been drawn without issuing government bonds. Funding the 59.4 trillion won (US$46.3 billion) budget includes excess tax revenue of 53.3 trillion won (US$41.6 billion), alongside a variety of funding sources from some ministries and agencies.

More than 40% (23 trillion won or US$17.9 billion) of the 53.3 trillion won (US$41.6 billion) in excess tax revenue will be allocated to budgets for local governments, according to the ministry’s press release.

Of the 36.4 trillion won (US$28.4 billion) for feasible utilisation, 23.0 trillion won (US$17.9 billion) will be used to support 3.7 million self-employed and microbusiness owners. The government will give payouts of 6 million won (US$6,480) to 10 million won (US$7,800) to each to compensate for their financial loss amid the pandemic, in consideration of sales and damages by industry.

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When quarantine support payouts of 4 million won (US$3,120) are included, some businesses will be paid up to 14 million won (US$10,920), the Finance Ministry said.

About 1.7 trillion won (US$1.3 billion) will be provided as a bailout and there will also be state-led loans on discounted interest rates for small merchants and the self-employed, according to The Korea Herald.