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(News Focus) Moon to expand income distribution, protection for the vulnerable

2017/05/10 00:14

By Yoo Cheong-mo

SEOUL, May 10 (Yonhap) -- Moon Jae-in who is sure to win the presidential election is expected to push for policies to reinforce welfare for low-income, marginalized citizens and disperse economic benefits more widely as his government seeks to tackle low growth, widening inequality and an aging population.

The liberal politician has pledged to build an economy in which broad-based income distribution drives domestic demand, economic growth and job creation. He believes the government must play a greater role in establishing a virtuous cycle of social inclusiveness and economic prosperity.

This photo taken on April 18, 2017, shows Moon Jae-in meeting with a group of senior citizens at a public welfare center in Jeonju, North Jeolla Province. (Yonhap) This photo taken on April 18, 2017, shows Moon Jae-in meeting with a group of senior citizens at a public welfare center in Jeonju, North Jeolla Province. (Yonhap)

"In the past, many people thought that economic growth would naturally lead to job creation. But that's not possible now," Moon said in a recent television debate.

"Household incomes should be increased to stimulate consumption. Increased domestic demand will then boost economic growth, resulting in the creation of more jobs."

   Moon's campaign pledged to spend 18.7 trillion won (US$16.5 billion) annually for his ambitious welfare programs to tackle problems from poverty to demographic changes, from housing to the social safety net.

During the campaign, he promised new and increased transfer payments for the elderly, jobless youth, people with disabilities and other underprivileged members of society.

The programs will be funded by raising income and corporate taxes, eliminating unnecessary government expenditures and reinforcing a crackdown on tax evasion.

As an effort to tackle the problems of a fast-aging population, Moon seeks to increase state payments, jobs and health care for elderly people.

Those aged 65 years or older are expected to account for 14 percent of the country's 51 million people at the end of this year.

The Moon government plans to provide a monthly allowance of 300,000 won to all elderly people in the lower 70 percent of the income bracket, an increase from the current monthly payments of between 100,000 and 200,000 won.

"Currently, only about 40 percent of the elderly actually receive all 200,000 won in monthly pension due to various reductions. I will give 300,000 won to every senior citizen (in the lower 70 percent of the income bracket) without any deductions," the 64-year-old Moon said in a meeting with elderly citizens in mid-April.

Moon has also promised more jobs and wages for people who are past the retirement age but still need to work.

He will double the monthly wage for public jobs reserved for the elderly to 400,000 won from the current 200,000 won and the number of such jobs to 800,000 from the current 430,000.

Moon has also promised to extend health care benefits to those suffering from dementia and put a ceiling on out-of-pocket payments, which he said will greatly reduce the costs that patients and their families must bear. Currently, about 700,000, or one in every 10 people aged 65 years or older, suffer from the disease.

The government will also lower the personal cost of dentures and dental implants for the elderly by nearly half, Moon said.

For those who live in remote or rural areas without easy access to public transportation, Moon promised to introduce new government-backed taxi services that will charge the elderly only 100 won, or about 10 cents, per trip.

Moon's government will likely extend additional support for child rearing and build more state-run preschools to help boost the country's rock-bottom birthrate.

The number of state-run kindergartens and preschools will be expanded to have at least 40 percent of all children enrolled at such facilities during Moon's five-year presidency.

As young parents call the high costs of private kindergartens and day care centers a serious burden, Moon has said he will even work with private centers, turning those that are struggling into public facilities while improving others so that they provide similar services as public ones.

Moon will double the monthly allowance paid to parents on childcare leave by employers from the current 40 percent of their normal wage to 80 percent.

Parents will be given a monthly allowance of 100,000 won for each child under the age of five, while they will also be allowed to reduce their daily working hours to six for up to 24 months without any reduction in salary.

Mothers without unemployment insurance will be paid a monthly maternity allowance of 500,000 won for three months.

As many as 59.8 percent of the 1,302 women surveyed by the Korea Institute of Child Care and Education between July and August last year said financial aid from the government for childcare and education was the most important service.

In addition, 19 percent wanted the government to increase the number of nurseries and kindergartens and 11.8 percent demanded an increase in the childcare leave period.

Civic activists hold a rally in downtown Seoul on April 30, 2017, calling for government measures to ease youth unemployment. (Yonhap) Civic activists hold a rally in downtown Seoul on April 30, 2017, calling for government measures to ease youth unemployment. (Yonhap)

To help job seekers, Moon is expected to push to pay a monthly allowance of 300,000 won to all job-seeking youths for nine months. In the case of a small company hiring two young workers, the government will pay the wages for a third young employee.

Moon promised to increase the basic monthly allowance for the disabled to 300,000 won. His campaign noted government spending for people with physical and mental disabilities accounted for only 0.61 percent of the nation's gross domestic product in 2013, far lower than the OECD average of 2.1 percent that same year.

In the heath care area, he seeks to ease the burden of individual medical expenses, have caregiving expenses phased out at public hospitals, and child patients under the age of 15 will be given exemptions from hospitalization expenses.