Throughout her campaign and transition period…
President-elect Park Geun-hye pledged to make welfare programs for the people her top priority.
Last Tuesday,… the Korean government passed this year’s budget… with about one third
of the funds allocated to welfare benefits. Ji Myung-kil … joins us now to walk us through.
Good evening. Good evening.
Last week the government approved this year’s 322 billion U.S. dollar budget.
Of that, 94 billion dollars was outlaid to fund welfare programs,…which is a third
of the total budget. And some of Park Geun-hye’s welfare pledges
were funded such as pushing forward with free childcare across the board and increasing
college tuition support. So what stands out in the array of benefits? The three most noticeable welfare programs
are free childcare, funding college tuition fees and an increase in soldier’s salaries. Parents can choose to receive money for sending
their children to daycare centers or get cash benefits for raising their children at home.
Couples with a newborn will be able to receive up to three-hundred-seventy dollars a month
in childcare expenditures or opt for 188 dollars in child rearing expenses.
Regardless of how many children there are in a family… parents will receive support
for each child. Next, college tuition fees will be gradually
funded over the next three years. Students’ in the bottom 20 percent income
bracket will be eligible to receive more than 4-thousand dollars per semester.
And students from the bottom 40 to 70 percent range will see their tuition burdens halved. And some good news for young Korean men fulfilling
their military service,…their salaries will increase by 20 percent starting this year
for all ranks. Sergeants will receive 122 dollars a month up from 101 dollars and Privates
will receive 92 dollars up from 77 dollars. So we have some benefits based on income…
but childcare will be provided to all? Yes, for example, the childcare service for
newborns to five year olds is available to anyone regardless of their income level.
But experts say, in order to be more effective…the policy needs to be designed better. “I think within the universal policy scheme
there is still room to think about whether you want to put more policy incentives for
those families where both parents are working because they will be the ones who need more
support,…clearly from a policy perspective you want to have more children from low income
families to go to childcare centers.” And starting in March, Korean parents who
send their children age five and under to daycare centers will be able to pay their
expenses with special cards, which are being provided by the government. And what about health care. That’s a big one
to tackle. President-elect Park Geun-hye has
promised 100 percent national health insurance coverage for severe diseases starting in 2016.
Parliament is also pushing to increase pensions for the elderly over the age of 65,…starting
with people whose incomes are in the bottom 70 percent. (Korean)
“You need more than seven billion dollars to fund pensions for senior citizens over
the age of 65 and within 20 to 30 years this could put a huge burden on tax payers.” We’ve heard from the Park camp that she will
try to expand welfare without directly raising taxes.
Will these creative measures succeed? Experts say, welfare is not free and somebody
has to pay for it. And the society will need to have some kind of consensus of how much
resource will be spent on certain welfare programs.
Kim Jae-jin at the Korea Institute for Public Finance says there are many ways to increase
taxes. He says you can revive the underground economy
and collect more taxes. The government could also reduce tax cuts on non-taxable objects,
which would be worth more than 28 billion dollars, and could collect taxes on overdue
payments, which would also add up to more than 28 billion dollars. Another option is
to raise income and corporate taxes which the current Lee Myung-bak administration cut. (Korean)
“As Korea’s society ages fast with low birth rates…the government needs to find stable
sources in tax revenues as the number of taxpayers(working people) will likely decrease in the future.” Well it seems the government needs to work
on how to secure money for more welfare programs. Thank-you Myung-kil. Sure.