Park takes knock over welfare budget trim

SOUTH KOREA - The anticipated rollout of President Park Geun-hye's 2014 budget plan this week with a significant trim in her flagship welfare pledge is expected to weigh down on the government's smooth sailing.

Despite Park's previous reiteration that all her presidential pledges "will be kept," the government has been dropping hints recently of a significant cutback in some of her key welfare plans, particularly the basic pension benefits that had earned her vast support from older voters.

Her pension plan revision only looks likely to be the first of many welfare policy curtailments down the road as the government confronts the realistic struggles such as the economic slump and tax revenue deficiency.

Added to that, Park faces escalating political opposition over the National Intelligence Service debacle, while her well-received North Korea policy has been tested by Pyongyang's unilateral postponement of the separated family reunions last week.

The main opposition Democratic Party, still fuming over the failed three-way talks of last week, is vowing a tough parliamentary process ahead including the budget review and the government audit. They are also resolute on stepping up their protest against the NIS' political role and Cheong Wa Dae's alleged pressure behind prosecutor general Chae Dong-wook's resignation.

Park's approval ratings are already showing signs of faltering.

A survey on 1,000 adults by researcher Realmeter showed last Friday that 60.9 per cent approved of Park's administration skills. While the rate is still high, it was 8.6 percentage points lower than a week ago when 69.5 per cent supported her.

Another survey carried out on the same day on 1,000 adults by Research & Research also indicated stumbling popularity, with 66.0 per cent supporting her compared to 72.7 per cent the previous week.

Political watchers said the decline appears to derive from the failed negotiation on the parliament gridlock between Park and the leaders of the rival political parties on Sept. 16 right before the Chuseok holidays. While the ruling camp blamed the opposition for resorting to political tactics and shunning livelihood-related issues pending at the National Assembly, public opinion has shown "some disappointment" in her leadership skills as well, they said.

"While Park had separated herself from political issues up until the three-way talks, the meeting during which Park also delivered her positions on the conflicting issues with the DP had the effect of the public now associating her with the controversies," Yoon Hee-woong, a senior researcher at the Korea Society Opinion Institute, told The Korea Herald.

"The negative perception, added with the opposition's stronger offensives against her trimmed-down welfare pledges, will make it hard for Park to improve her ratings," Yoon said.

Park will clarify her position at the Cabinet meeting on Thursday when the government announces the 2014 budget blueprint, the presidential office said. The curtailed version of the pension benefit plan is to be released simultaneously the same day.

Days ahead of the slated announcement, news reports said Park's entrusted aide Welfare Minister Chin Young was likely to step down to take responsibility for the backtracked pledge.

The DP immediately rebuffed what they claimed was a "preemptive attempt" to water down the anticipated disapproval to the pension plan revision and said Chin's resignation alone would not suffice.

Various sources from Cheong Wa Dae and the government were quoted in news reports as saying that significant parts of the presidential pledges had been reduced while preparing the budget.

They reportedly admitted that such expensive pledges as the full coverage of four major diseases and some of the social overhead capital-related projects will have to be cut back due to difficulties deriving finances amid a slow economy and tax revenue shortfall.

The basic pension benefits, in particular, for which Park had promised to dole out 200,000 won (S$234) monthly to every senior citizen aged 65 and older, was expected to cost 60 trillion won over the next four years. Critics had long suggested the plan was financially unrealistic.

The revised plan is likely to divide up the benefits, and provide 70 per cent of the subject age group up to 200,000 won worth of benefits that are commensurate with their pension terms and economic situation, the sources said.

Free child care, also one of Park's signature welfare promises, is likely to face an adjustment as the central government continues to lock horns with municipalities over how to finance them.

Other precarious pledges include college tuition cuts and free education for high schoolers.

Park had said during her three-way talks that she might consider raising taxes "upon public consensus" if the welfare fund deficiency continues despite efforts such as adjusting the annual expenditures or reducing nontaxable income.

"It is deemed that (Park) will sincerely explain to the people an acceptable reason once the government's plan is announced," a Cheong Wa Dae official told reporters Sunday.

The DP, meanwhile, is determined to rip into Park's pledge cutback. They claim that Park is stepping back on her word after successfully competing with the DP presidential candidate Moon Jae-in, who had pledged similar pension benefits for 80 per cent of seniors. The DP plans to shun the government's revised welfare plan and demand the original plan be maintained such as by "cutting tax reductions for the rich."

"I would like to ask the president what we have left of her if she turns back on all her four trademarks from the election including basic pension, child care, four major disease subsidies and economic democratization," said DP's chief policymaker Rep. Chang Byoung―wan.

The ruling Saenuri Party, for their part, supported the government's decision as inevitable.

"While it is highly regrettable that the pledges cannot be maintained, we must fully explain to the people the country's financial situation and seek their understanding," said Saenuri Supreme Council member Rep. Shim Jae-chul.