Presidential aspirants keep pouring out costly welfare pledges without taking into account the nation’s slowing economic growth and a growing sense of crisis among domestic corporations.
Park Geun-hye, the leading candidate of the ruling Saenuri Party, and her rivals in the main opposition Democratic United Party have promised to offer free education to high school students.
Park’s plan called for phasing in free education for 1.42 million high school students over four years starting in 2014. She said the project would cost the nation 2.6 trillion won a year from the fourth year on.
She also promised to provide tuition assistance to low-income college students and to make after-school child care available for all working couples. For these programs, she did not give cost estimates.
Sohn Hak-kyu, a DUP presidential hopeful, presented a similar plan for high school students. The former DUP leader said he would make high school education compulsory as almost all middle school graduates ― 98 percent ― go to high school.
Sohn disclosed a three-step scheme that would apply to students on islands and in backwater areas in the first year, rural and fishing villages in the second year and the entire nation in the third year. He put the cost at 2.7 trillion won a year.
Moon Jae-in, the DUP’s presidential frontrunner, also said he would make high school education free.
Financing high school education with state funds is necessary, given the high ratio of middle school students attending a high school. It deserves a higher priority than subsidizing college tuitions.
But the problem is money. Where do the required funds come from? These days, the central and local governments are quarreling over the funding of the hastily expanded day care subsidy program for children under 24 months old.
The program was originally planned to provide a subsidy to families in the bottom 70 percent of the income distribution. But the ruling party abruptly decided to expand it to cover all families, regardless of their income, in its bid to win the April general elections.
As a result, local governments, which are required to bear about half of the costs, ran out of funds as they were not prepared for the expansion. The program is unsustainable as the central government cannot cover the funding shortages of provincial governments either.
The row over the subsidy scheme should provide a lesson to all presidential candidates. Before unveiling a new welfare program, they need to make sure that funding will be available.
They also need to design their welfare schemes in a way that can contribute to creating jobs, especially for youth and women. Plans aimed at expanding social services are preferable to schemes providing monetary payments.
