Governor Lee Jae-myung Compiles Emergency Budget Supplementation to Overcome Economic Crisis

[Suwon Ilbo=Reporter Park No-hun] To overcome the economic emergency caused by COVID-19, Gyeonggi Province has decided to support a total of 150 billion won from its own projects, including 100 billion won in small loans for those with extremely low credit ratings and 50 billion won in emergency support for vulnerable groups.

Governor Lee Jae-myung of Gyeonggi Province held a press conference at Gyeonggi Province Office on March 20th and announced an emergency supplementary budget plan of 1.1917 trillion won in response to COVID-19. This marks the first supplementary budget for Gyeonggi Province in March since 2010, the first time in 10 years.

Governor Lee stated, "As COVID-19 prolongs, it threatens not only our safety but our very lives. An unprecedented economic crisis is approaching," adding "Streets are empty, and small business owners have been hit hard. To respond urgently to COVID-19, as all residents and citizens face this difficult battle, we have compiled the first supplementary budget for 2020."

The province increased the budget by 1.1917 trillion won, which represents approximately 5.1% of this year's general account base budget. The total supplementary budget is 28.23 trillion won, with 24.7862 trillion won in the general account. The 1.1917 trillion won in funding comes from 597.5 billion won from the province's own resources, including the sale of seed management office land, and 594.2 billion won from national subsidies.

Governor Lee explained that the supplementary budget will be allocated to three areas: ▲support for stabilizing people's livelihoods and recovering the local economy ▲support for small and medium enterprises and small business owners ▲expansion of disease response systems.

Specifically, to support residents' living stability and economic recovery, 705.8 billion won will be invested immediately.

Notable allocations include ▲emergency welfare support of 461.1 billion won for temporary child care support and living support for low-income groups ▲150 billion won for small-scale financial support and emergency support to overcome COVID-19 ▲94.7 billion won for local currency issuance and expansion of public jobs.

Among these, small-scale financial support targets residents with credit ratings of grade 7 or below who have lived in Gyeonggi Province for at least one year, out of 875,653 people nationwide (as of August 31, 2018). The province plans to provide an immediate no-check loan of 500,000 won per person at 1% annual interest for five years (extendable for an additional five years for a total of 10 years). For those with urgent circumstances, loans up to 3 million won will be provided with minimal review. If all 100 billion won is used due to high demand, an additional 100 billion won will be allocated.

Emergency support for vulnerable groups targets 100,000 households among the vulnerable (those with income below 100% of the median household income, property assets of 242 million won or less, and financial assets of 10 million won or less) who have lost income for more than one month or experienced a 50% or greater decline in sales due to COVID-19 but are excluded from government emergency welfare programs. Each household will receive 500,000 won in local currency. The province plans to distribute the support through eup, myeon, and dong offices as quickly as possible after budget confirmation, which is expected to occur in early April.

Governor Lee stated, "The reason Gyeonggi Province focuses on no-check small loans for those with extremely low credit ratings rather than cash support is because insufficient resources prevent us from supporting everyone," adding "this is a measure of last resort to provide help to those who urgently need small amounts of cash."

Governor Lee continued, "Even with 200 billion won in resources, if we provide 500,000 won per person, only 400,000 people can benefit, which is only 3% of Gyeonggi Province's 13.6 million residents," and stated "we determined it is more necessary to help those who must resort to high-interest loan companies or who cannot even do that put food on their tables right now."

Second, to provide financial support to small business owners and small and medium enterprises hit by the economic crisis, the province will increase spending by a total of 461 million won, including ▲293 million won in special funds for small and medium enterprise development ▲168 million won in support for small business owners and traditional markets.

Third, to strengthen the disease response system to end COVID-19, the province has additionally allocated a total of 516 million won, including ▲125 billion won for operating dedicated COVID-19 hospitals ▲225 billion won for living expense support for quarantined individuals ▲63 billion won for emergency COVID-19 countermeasures.

These funds will be used for the smooth and prompt implementation of COVID-19 related projects, including dedicated hospital operations and epidemiological investigation activities, screening clinics, preventive cohort quarantine facilities, and support for welfare facilities. The province also plans to implement a program to provide living expenses to self-quarantined individuals.

Governor Lee emphasized, "Gyeonggi Province prioritizes protecting the lives and safety of residents as our foremost task," and stated "we will implement the projects announced today without delay to alleviate residents' concerns as soon as possible."

The supplementary budget plan was submitted to the Provincial Assembly on March 20th and will be reviewed in an emergency one-point session for COVID-19 response to be held from March 23rd to 25th.