[Editorial] Balanced welfare policy

The nation has lost a precious opportunity to put the brakes on the rising tide of welfare populism as the free lunch referendum in Seoul held Wednesday was declared invalid due to low voter turnout. Only 25.7 percent of the capital city’s 8.4 million-strong electorate voted, falling far short of the required 33.3 percent. As a result, the ballot boxes were not even opened, let alone counted.

The outcome has consigned to the dustbin Seoul Mayor Oh Se-hoon’s more sensible proposal to limit free lunches to students from families in the bottom half of the income ladder, while giving the go-ahead for the main opposition Democratic Party to implement its plan to offer free meals to all elementary and junior-high pupils regardless of their parents’ income.

In his desperate effort to boost voter turnout, Mayor Oh staked his office as well as his candidacy for the 2012 presidential election on the result of the plebiscite. But as his odds-defying bet failed, he has to resign as promised. Oh said he would not mind fading into the mists of history if he could help sustainable welfare take root in Korea. It is regrettable his efforts have ended in vain.

The referendum was not just about school meals; it was more about welfare policy and the coming parliamentary and presidential elections. DP Chairman Sohn Hak-kyu summed up the party’s view of the vote outcome by declaring that “Today marks a watershed in Korea’s march toward a welfare society.”

DP leaders took the poll result as an endorsement of the party’s so-called “3+1” welfare promises ― free lunch, free child care, free health care plus half-price tuition. Now the party plans to add job placement and housing support to its welfare package. Thus it will dangle an upgraded bait ― “3+3” package ― before voters for the parliamentary and presidential elections slated for next year.

But DP politicians should not read too much into the vote outcome. They need to remember that in almost all surveys conducted before the poll, support for Oh’s proposal was higher than that for the DP’s “universalist” lunch scheme by as much as 20 percentage points. This implies that while Seoul citizens want an expansion of welfare, they do not demand excessive benefits from the state either.

If the opposition party ignores this message and recklessly pursues its new welfare package, it would not only set itself up for disappointment but push the nation toward a fiscal train wreck. Recently, many eurozone countries, such as Greece, have demonstrated the painful result of unrestrained fiscal profligacy.

Free welfare services are nothing more than an attempt to bribe the public with the public’s money. If political parties seek to buy votes with taxpayers’ money to grab power, it is a sure recipe for disaster. Voters should see such attempts for what they are.

The poll outcome has put the ruling GNP into a dilemma. It can neither allow the DP to dominate the welfare debate nor propose policies that would impose too much burden on the government budget. In the run-up to the key elections next year, the party is likely to lean toward more generous welfare policies. But it needs to behave prudently. It should take care not to be swept into a race toward welfare populism.

The ruling party should always remember the importance of maintaining fiscal soundness. The nation could overcome the devastating foreign exchange crisis in 1997 and the financial crisis in 2008 thanks largely to its sound fiscal position.

The school lunch referendum clearly showed a majority of Koreans want expanded welfare benefits. To meet this demand, welfare spending needs to be increased. However, it is also clear that Koreans do not want a rapid transition toward a full-fledged welfare state. They prefer a slow but steady transition in light of the nation’s limited fiscal resources. Politicians should be wise enough to listen to the people’s true message.