SUPPORT FOR SMALL BUSINESSES

[Anchor Lead]

As they went over the new supplementary budget plan yesterday, Korean lawmakers focused their attention on the financial relief package for small businesses hit hard by the toughened social distancing guidelines. The government decided to increase the budget for loss compensation and the restoration grant that was once capped at 9 million won.

[Pkg]

The toughening of social distancing guidelines for the Seoul metropolitan area came as a big shock to small business owners. Some claim that the longer they stay open, the more money they lose.

[Soundbite] Lim Seong-chae(Restaurant Owner) : "We were just getting our customers back, but we have none now due to the level 4 measures. At this rate, we’re all going to starve."

The merchants had not seen this coming when the government was drawing up a supplementary budget plan only a month ago. At the time, only some businesses were banned from operating after midnight and social distancing measures were expected to come down to level 2 and allow up to eight people to gather at one time. The extra budget plan now includes 600 billion won to be given out to 520,000 small businesses nationwide over the next three months. But that amount is not nearly enough as one million small businesses in the capital region alone stand to suffer financially because of the toughened distancing measures. Even if the 600 million won were to be distributed all at once, that would amount to only 600,000 won per person.

[Soundbite] Kwon Chil-seung(Minister of SMEs and Startups) : "The current supplementary budget was designed on the basis of level 2 measures nationwide. Since the measures were toughened to level 4 in the capital region and level 2 in other regions, the budget amount should be increased as well."

The government plans to revise the amount of estimated loss in the supplementary budget plan, but the estimation covers only the period between July and September. Since the detailed criteria for damage compensation are to be finalized in October, the losses incurred after October will be compensated with next year’s budget. That means the financial damage already suffered will be compensated three months later. But small business owners already on the brink of bankruptcy are likely to object as they won’t be able to receive financial aid immediately. Aside from the loss compensation, the government also plans to increase the restoration grant that was capped at 9 million won. The grant will probably be given out in August, if the extra budget plan is approved by the National Assembly as planned.