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Cho Jeong-sik (right), chair of the Democratic Party’s policy committee, presides over a National Assembly meeting on the 2021 budget on Aug. 26. (Yonhap News)

The South Korean government and the ruling Democratic Party have decided to allocate the Korean New Deal and the Youth Hope Package more than 20 trillion won (US$16.9 billion) each in the 2021 budget. The funding will make high school education free for all students next year, one year ahead of schedule. The government will also be greatly expanding the supply of public rental housing for young people and newlyweds.

Following deliberations between the Democratic Party and the government over the 2021 budget bill in the National Assembly on Aug. 26, Cho Jeong-sik, chair of the party’s policy committee, said that lawmakers and officials were in agreement about the need to maintain an aggressive fiscal expansionary approach next year to stabilize people’s livelihood and to ensure a swift economic recovery. Cho reported an agreement to greatly boost funding for launching programs in the Korean New Deal, energizing local economies, strengthening the employment safety net, and establishing sweeping policies for young people.

The government is planning to extend national medical insurance coverage to chest ultrasounds, heart ultrasounds, and spinal disc disorders. It also plans to expand public rental housing to 190,000 units as part of a program for young people and newlyweds. The amount of community currency that will be issued to promote local economies will increase from 9 trillion won (US$7.59 billion) this year to 15 trillion won (US$12.65 billion) next year.

Next year’s budget will also include measures to bolster the disease control system in preparation for a protracted battle with COVID-19. Each phase of disease control — including prevention, diagnosis, and treatment — will be enhanced, with more support given for the swift development of a COVID-19 vaccine and medication. The amount of money to be spent on Korean New Deal programs has also been considerably increased, with over 20 trillion won slated for inclusion in the 2021 budget bill.

“We’ll review the measures we’ve taken to counter the harm caused [by COVID-19], adjust them in line with the recent spread of the disease, and implement them without wavering. Fiscal policy will serve as both the crux of those measures and as our last line of defense,” said Hong Nam-ki, minister of economy and deputy prime minister.

By Seo Young-ji, staff reporter

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