Government not to retrieve 800 billion won of funds for 570,000 small business owners prepaid during covid pandemic

Kim Ki-hyun, leader of the People\'s Power Party, speaks during the 14th High Level Political Consultative Meeting at the Prime Minister\'s Office in Jongno-gu, Seoul, on Monday morning.By Jae-won Moon

On October 29, the People Power Party (PPP) and the government decided to exempt nearly 570,000 small business owners who received advance payments of the New Hope Fund and the Small Business Support Fund despite increased sales during the COVID-19 pandemic from repaying a total of 800 billion won in disaster relief funds. The PPP plans to amend the Act on the Protection of and Support for Micro Enterprises to provide grounds for the exemption.

Senior officials from the PPP and the government met in the prime minister’s residence Sunday and announced the latest decision adding, “To ease the business difficulties of small businesses and the self-employed, we have decided to strongly lighten the financial burden and stimulate domestic demand.” The government explained its decision to exempt payment on grounds that the administrative office and small business owners were not responsible for the urgent payment of disaster relief funds in the absence of sales information at the time and that small businesses currently faced challenges due to high interest rates.

Earlier, the Moon Jae-in government had stated that it would retrieve the funds handed out to small businesses whose sales increased during the covid pandemic after the PPP pointed out the mistake. The Yoon Seok-yeol government maintained the policy, but appears to have changed its position in the latest meeting with the PPP. Accordingly, PPP legislator Lee Chul-gyu proposed an amendment of the Act on the Protection of and Support for Micro Enterprises including grounds for the government not to retrieve the disaster relief fund from small businesses.

To ease the debt burden on ordinary households, the PPP asked the government to improve the proportion of loans with high variable interest rates. In response, the government decided to introduce the “Stress DSR,” a system that applies a certain premium when calculating the total debt service coverage ratio (DSR), within the year.

As for responses to infectious diseases in livestock, the government announced it would finish bringing in four million doses of the lumpy skin disease vaccine by the end of this month and complete vaccination of all cattle in the country by November 10.