24th Meeting of Central Economic Response Headquarters
Government Announces New COVID-19 Package
Worth 9.3 Trillion Won
Deputy Prime Minister Hong Nam-ki presided over the 24th Meeting of the Central Economic Response Headquarters, held on December 29, and discussed a new coronavirus package worth 9.3 trillion won, which is larger than the 7.8 trillion won worth of 4th supplementary budget of this year. A total of 5.8 million Koreans are expected to benefit from the package.
The following is a summary of Deputy Prime Minister Hong’s keynote address.
The package
The government has drawn up a package to support small businesses and workers affected by surging cases. The 9.3 trillion won worth of package includes
- 5.6 trillion won worth of emergency relief for businesses and workers hit by stricter social distancing
- 800 billion won for stronger disease prevention
- 2.9 trillion won to provide support for severely affected sectors and individuals
Sources of financing will be
- reserve funds (4.8 trillion won)
- budget spending transferred from 2020 to 2021 (0.6 trillion won)
- 2021 budgets and government funds (3.9 trillion won)
Emergency relief for small businesses and workers
Small businesses
- 4.1 trillion won worth of cash relief for a total of 2.8 million small businesses, reliefs varying from 1 million won to 3 million won per business according to the degree of losses
- Low interest rate loans and credit guarantee schemes for small businesses affected
- Extend tax incentives for rent cuts given to commercial property owners
- Expand the payment deferral for utilities bills and social security contributions
Workers
- 500 billion won worth of cash relief for independent workers, including platform workers and freelancers: 378.2 billion won for 700,000 independent workers (1 million won per worker), 46 billion won for 90,000 visiting nurses (500,000 won per nurse) and 40 billion won for 80,000 taxi drivers (500,000 won per driver)
Strengthen disease prevention
The government will provide a total of 800 billion won worth of support over the first quarter for emergency disease prevention.
- Spend 400 billion won on improving the whole process of testing-quarantine-treatment, such as strengthening facilities and equipment
- Send medical workforce to areas where the virus is surging and provide them with risk allowance
- Spend 166.1 billion won on testing: Share testing costs and increase testing sites
- Improve quarantine: Spend 32.3 billion won on effective quarantine and 111.1 billion won in screening for the UK coronavirus strain
Provide support for severely affected sectors and individuals
The government will provide 1 trillion won for extra support for small businesses and SMEs, including programs to promote retrial and reemployment after failure.
- Spend 100 billion won on retrial and reemployment, and 22 billion won to help small businesses with online marketing
- Issue traditional market gift certificates worth 5 trillion won in the first quarter, out of a total of 18 trillion won planned this year
- Provide liquidity: Cut guarantee fees for small business loans and provide 10,000 SMEs with emergency loans
- Provide special support for winter sports businesses and hotels, which suffer from stricter social distancing over the new year holidays, such as with emergency loans, job retention support, cash reliefs and COVID-19 hygiene support
- Invest 1.6 trillion won in employment security programs, including 900 billion won to help retain jobs
- Spend 500 billion won on reemployment, retraining, small loans for the unemployed and essential worker welfare
- Invest 300 billion won to help parents with childcare amid school closings: Share daycare costs, promote flexible workhours by giving employers incentives and run emergency daycare program
Plans for the future
The most important is to provide the support in time. The government will work to have the support delivered from January 11, and before the Lunar New Year holiday, will have about 90 percent of those eligible receive the support. Ultimately, we will work for the year 2021 to be the year of getting out of the crisis, stepping on recovery and turning around.
