Newborn baby’s feet./Pixabay
It was confirmed on the 25th that the government is pursuing a plan to use a portion of local education financial grants and education taxes worth 80 trillion won per year as a budget to respond to low birth rates. Through this, the government plans to significantly expand ‘cash payments’ to families with children, such as parental leave benefits and child allowances, by establishing a ‘low birth rate fund’ or ‘low birth rate special accounting budget’ worth about 11 trillion won per year. It is reported that the President’s Committee on Low Birth Rate and Aging Society (hereinafter referred to as the Low Birth Rate Committee) will announce a policy to respond to low birth rate with these contents at a plenary meeting attended by President Yoon Seok-yeol next month.
According to our coverage, the government is pursuing a plan to increase cash payments that directly help with child care and raise the payment amount to the average level of the Organization for Economic Co-operation and Development (OECD). The plan is to attempt to rebound Korea’s total birth rate (0.7 in the third quarter of this year), which is the lowest in the world, by expanding cash payments with a high perceived level of ‘birth encouragement.’ The government is considering raising the upper limit of childcare leave benefits from the current 1.5 million won to 2 million won, and expanding the child allowance payment age from the current 0 to 7 years old to 0 to 17 years old. The government believes that an additional budget of approximately 10.9 trillion won per year is needed to continue implementing this type of child support cash payment.
The government is considering a plan to cover this budget as part of local education financial grants and education taxes. The local education financial grant, which automatically allocates 20.79% of the government’s domestic taxes to 17 city and provincial offices of education nationwide, currently has a surplus. This is because the size of grants is increasing every year as the economy grows, while the number of students is decreasing every year. Last year, the size of this grant was 76 trillion won. The budget of city and provincial offices of education across the country that were left unused or passed over to this year amounted to 7.5 trillion won. The government is also pursuing a plan to change the education tax, which has an annual tax revenue of about 5 trillion won, into a ‘population/education tax’ or ‘childcare/education tax’ and use part of this as a low birth rate budget.
There is also an observation within the government that “implementation will not be easy as there is likely to be extreme opposition from city and provincial offices of education to using local education financial grants as a low birth rate budget.” A high-ranking government official said, “The low birth rate is the most urgent task, and raising children is the starting point of education,” and added, “We will persuade each city and provincial office of education.”
2023-12-25 20:04:35
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