Gyeonggi Province Implements 'Disaster Basic Income'...10,000 Won per Person to Be Distributed Starting April

[Suwon Ilbo=Reporter Park No-hun] Gyeonggi Province has decided to distribute 100,000 won per capita in disaster basic income starting in April to overcome the economic crisis stemming from COVID-19. As social discussions on disaster basic income continue, the province is implementing a basic income system that targets all residents regardless of income and age.

Governor Lee Jae-myung of Gyeonggi Province held a press conference at the Gyeonggi Provincial Government building on the 24th and stated, "In the face of this historic crisis brought about by COVID-19, we must turn crisis into opportunity and prepare for a new era," announcing the plan to distribute Gyeonggi Province-type disaster basic income. Attending the event were Song Han-jun, Speaker of the Gyeonggi Provincial Council, and Yeom Jong-hyun, Democratic Party representative of the Gyeonggi Provincial Council.

Governor Lee stated, "While there were opinions to exclude some high-income earners and minors, or to differentiate payments for minors, this goes against the ideology of basic income. Excluding high-income earners constitutes double discrimination against high-tax payers, involves excessive selection costs, and minors are also taxpaying residents of the province whose consumer spending needs are no different from adults, so we made no exclusions or discriminations," he explained.

Accordingly, Gyeonggi Province will distribute 100,000 won per capita starting next month, or 400,000 won for a family of four, as disaster basic income. The specific target for Gyeonggi Province disaster basic income distribution applies to those who have been residents of Gyeonggi Province from the reference time of 24:00 on March 23, 2020, until the date of application. According to resident registration population statistics as of the end of February 2020 announced by the Ministry of the Interior and Safety, Gyeonggi Province's population is 13,265,377.

The distribution procedure allows residents to receive the full amount immediately upon application starting in April at their local eup-myeon-dong Administrative Welfare Center with only identity verification (a power of attorney is required for adults representing all household members).

Gyeonggi Province-type disaster basic income will be distributed in regional currency that expires three months from the distribution date. By having the full amount consumed in a short period, the province aims to achieve dual effects of supporting households as well as increased sales for businesses and self-employed workers.

The necessary funding of 1.364 trillion won was secured through internal borrowing from the Disaster Management Fund of 340.5 billion won, the Disaster Relief Fund of 273.7 billion won, and the Regional Development Fund of 700 billion won generated from vehicle purchase bond sales. For the remaining shortfall, 5 billion won was cut from the 100 billion won ultra-low credit loan project announced last week, taking into account the reduced support gaps.

Regarding the background for distributing Gyeonggi Province-type disaster basic income, Governor Lee stated, "In the era of low growth and the Fourth Industrial Revolution where we must worry about excessive concentration of income and wealth through technological revolution and mass unemployment, basic income transcends welfare policy and is a core means of inclusive economy championed by world economic organizations, and is the sole economic policy that guarantees sustainable growth." He added, "For our society to fully implement basic income, more public discussion, understanding, and financial preparation are needed, but the unprecedented economic crisis caused by COVID-19 has become an opportunity to recognize the necessity of basic income and accelerate its implementation."
He continued, "We considered various support measures for Gyeonggi residents and self-employed workers and businesses in crisis, but there was much conflict due to insufficient funding. From the perspective of the province, which has no tax decision-making authority and limited local bond issuance rights, it was difficult to create alternatives that meet all residents' expectations and satisfaction," he lamented.
Governor Lee further stated, "With the government's consideration, we were able to utilize the Disaster Management Fund and Disaster Relief Fund, but even combining all of these made it difficult to exceed 50,000 won per capita, so we mobilized all available resources. Although it is a small-scale and one-time measure, I hope Gyeonggi Province-type disaster basic income will serve as a catalyst for national-level basic income discussions and take root as a new policy befitting a new era," he said.
Previously, the Gyeonggi Provincial Council's Public Safety and Administration Committee passed the 'Gyeonggi Province Disaster Basic Income Distribution Ordinance' on the 23rd, establishing the first nationwide foundational ordinance enabling the distribution of Gyeonggi Province-type disaster basic income to residents when a disaster occurs. The ordinance is scheduled for final passage at the Provincial Council's extraordinary session plenary meeting on the 25th.

Meanwhile, according to analysis by the Gyeonggi Research Institute applying the Bank of Korea's Input-Output Table (2017 extended version) on the economic ripple effects when implementing disaster basic income of 100,000 won per capita, the production inducement effect was 1.1235 trillion won, the value-added inducement effect was 622.3 billion won, and the employment inducement effect was 562.9 billion won.