As the standard for loss compensation for small businesses was finalized, the government began to identify the financial requirements for loss compensation.
As the amount of compensation for losses in the third quarter of this year is larger than previously expected, we are reviewing the pre-set budget (already confirmed budget) and surplus funds that can be diverted.
According to the government authorities, the Ministry of Strategy and Finance is in the process of estimating the total amount of financial resources required by applying the standard for loss compensation for small businesses in the third quarter, which was confirmed on the 8th.
The Ministry of SMEs and Startups held the 1st Loss Compensation Deliberation Committee earlier and decided to apply the same 80% correction rate to the damage caused by the ban on gatherings and business hours restrictions.
The target for loss compensation is small business owners and small businesses that have suffered serious business losses due to a ban on gatherings and restrictions on business hours from July 7 to September 30 in accordance with the Infection Prevention Act.
This is a method of calculating the average daily loss for the same month of this year compared to 2019 when there was no impact of Corona 19, applying the period of implementation of quarantine measures and the correction rate.
The amount of financial resources required to compensate for losses has already increased significantly more than initially expected.
At the end of July, when the second supplementary budget was passed, the period of application of high-intensity quarantine measures was longer than expected, and the correction rate was also 80% at once instead of the 60% and 80% difference in accordance with the previously discussed business bans and restrictions. has been adopted to apply the
The decision to include payments from existing small business owners to small businesses is also a factor that increases the financial need.
Considering all these factors, the prevailing view is that the amount of compensation for losses due to quarantine measures in the third quarter of this year will exceed KRW 2 trillion, significantly exceeding the KRW 1 trillion previously organized as the second supplementary budget.
However, there are factors that reduce the need for loss compensation in the fourth quarter.
The transition to 'With Corona', which will be implemented in November, is highly likely to mean the easing of existing business bans and restrictions, such as lifting restrictions on business hours and number of small businesses.
While preparing the budget for next year, the government has set aside 1.8 trillion won to compensate small businesses for losses in the fourth quarter of this year and the first quarter of next year.
This is an estimate based on the assumption that the quarantine stage will be eased by one stage.
If the quarantine stage is relieved more than expected due to the Corona transition in the 4th quarter, the financial need for small business loss compensation will be reduced by that much.
Ultimately, if the business ban/restriction measures are completely eliminated, the need for loss compensation itself will disappear.
The financial authorities are looking at the established budget and the surplus funds that can be diverted to raise funds to compensate for the loss in the third quarter, which was higher than expected.
Among the funds, the Small Business Promotion Fund that meets the purpose of use is subject to priority review.
The government is of the view that it can mobilize more than 1 trillion won in additional funds if the fixed budget and surplus funds are mobilized.
If you add more than 1 trillion won of additional funds to the previously prepared 1 trillion won, there is no difficulty in compensating for losses in the third quarter of this year.
(Photo = Yonhap News)