Criticism mounts over Korea’s $40 mn costs for coupons

Criticism mounts over Korea’s $40 mn costs for coupons

최초입력 2025.07.09 10:53:08

(Lee Seung-hwan)

The South Korean government has allocated 55 billion won ($40.1 million) in administrative costs for its new consumer coupon program, set to begin applications on July 21. The move is sparking criticism that the spending is excessive.
According to the National Assembly and the Ministry of Economy and Finance on Tuesday, the additional budget bill – passed on July 4 as the first supplementary budget under President Lee Jae-myung – includes 55 billion won in administrative and incidental expenses to distribute the consumer coupons, as originally proposed by the government.
These administrative costs include expenses related to issuing the coupons in the form of local currency or prepaid cards, as well as operating call centers.
A large portion of the 55 billion won administrative cost comes from local currency issuance and labor expenses.
The Ministry of Interior and Safety estimated that 20.5 billion won and 17.2 billion won would be needed for these two items, respectively.
Private contractors that issue the local currencies – whether paper, card-based, or mobile – charge commission fees, which are included in the issuance cost.
Prepaid cards also incur issuance costs when distributed at town or district offices.
The government has allocated 5.2 billion won for this.
In contrast, when the coupons are provided as points on credit or debit cards, no separate issuance fee is incurred.
Labor costs are also part of the consumer coupon distribution.
“Local governments will need to hire temporary staff to handle online and offline applications,” said a government official. “The personnel costs included in the supplementary budget are intended for those workers.”
Additionally, 7.6 billion won has been set aside for acquiring hardware and software assets, and about 1.5 billion won for outsourced private sector services such as system development.
Anticipating a flood of inquiries and complaints related to coupon distribution and usage, the government also secured 900 million won to temporarily operate call centers.
Regarding the total 55 billion won in incidental expenses, the National Assembly Budget Office pointed out that “the systems required to distribute disaster relief funds and livelihood recovery consumer coupons are fundamentally similar.”
“Minor adjustments and enhancements can be made to existing platforms,” it said.
It criticized the practice of building new systems each time, only to dismantle them after one-time use, stating this raises concerns about the fiscal soundness of such budgeting.
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