hankyoreh

a figure with no precedent. Negative assessments of the ruling and opposition parties also have both increased. (by Kim Jeong-hyo

South Korea spends less on social services than any other member of the Organisation for Economic Co-operation and Development (OECD). Yet many pundits and politicians are now making the bizarre claim that excessive welfare policies are to blame for the shortfall in revenue to cover school meals and the NURI childcare subsidy program for children ages three to five. Kim Moo-sung, chairman of the ruling Saenuri Party (NFP), has argued the need for “readjusting free social services,” while South Gyeongsang Governor Hong Joon-pyo has announced plans to stop funding free school meals. It’s part of a growing chorus of calls for “ending the freebie party.”

In September, the National Assembly Research Service (NARS) published a report on national tax burdens and public and social service spending. It concluded that South Korea’s burden of 26.8% for 2012, representing taxes and social insurance as a percentage of GDP, ranked at the bottom of the OECD list, far below the 34.1% average for the 20 member states. Just 34.7% of the tax and social insurance burden was spent on public and social services - nearly half the 63.9% average for OECD countries.

Because the tax burden is relatively small, and the percentage of taxes and social insurance used toward welfare even smaller, South Korea’s social service spending as a percentage of yearly GDP comes out to a paltry 9.3%. The OECD average is more than double that at 21.8%. Most advanced economies spend over 20% - 22.3% in the case of Japan.

Sweden, which is considered the world leader among welfare states for its free health care, school meals, education, and child care, is perhaps the best example of a country with both a high burden and high social service spending. It has a 44.3% tax burden ratio, and spends a large amount of national finances on welfare (63.5%). Social service spending amounts to 28.1% of GDP.

In contrast, South Korea’s policies remain low on both the burden and spending sides, with little collected in tax revenue and a tight government fist on social service policies.

South Korea also rates poorly in terms of the amount budgeted for child care, school meals, and other child welfare services - the key issue in the current debate. A 2013 comparison of child and family welfare spending in OECD countries by the Korea Institute for Health and Social Affairs, a state-run think tank, showed South Korea ranking 32nd out of 34 countries. It budgets 0.8% of GDP for child welfare, or roughly one-third the OECD average of 2.3%. It is also one of only four countries in the organization without child allowances. (The others are Turkey, Mexico, and the US.) This has led many people to avoid having children: in 2013, the total birth rate was an ultra-low 1.19, putting it rock bottom among OECD countries.

Another metric showing the low level of social services is social wages, which amount to 12.9% of household disposal income - one of the lowest levels in the OECD. Social wages are the sum of welfare benefits available to individuals in terms of cash value. In advanced economies, they are an important component of household income. A low level means that government support for individual livelihoods is very weak.

Welfare policy weaknesses have resulted in serious social problems. The poverty rate for senior citizens aged 65 and older is 48.6% in South Korea, ranking it a solid first place in the OECD with more than three times the organization’s average of 12.4%. The population aging rate is the second highest in the OECD, which means that poverty among seniors is poised to grow further without social welfare policies to shore up incomes. The fastest-aging country, Japan, has a senior citizen poverty rate of 19.4%.

“We have to consider the different ways we can expand social welfare - through direct tax hikes, cutting exemptions, or raising social insurance premiums,” said Lee Man-woo, head of the public health, welfare, and women’s team at the NARS.

“We also need a social debate on which welfare model our society should be adopting,” Lee added

By Kim So-youn, staff reporter

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