Economic Experts Say "Top Priority for the 21st National Assembly is 'Regulatory Innovation and Labor Market Reform'"

KCCI Announces 'Survey of Economic Experts on Recent Issues'
73.4% of Experts Say "Urgent Need to Abolish Entry Regulations and Ease New Industry Rules"
On Fiscal Policy, "Expansion Needed but Minimally"

The Top Priority Policy Tasks for the 21st National Assembly (Source: Korea Employers Federation)

[Asia Economy Reporter Kim Ji-hee] Economic experts identified regulatory innovation and labor market reform as the top policy tasks that the 21st National Assembly should prioritize. They also urged that while the National Assembly should recognize the need to expand national fiscal management, it must maintain a policy of doing so minimally.

According to the results of the "Survey of Economic Experts' Opinions on Recent Issues" released by the Korea Employers Federation on the 24th, 73.4% of respondents pointed to regulatory innovation, such as abolishing entry regulations and easing regulations on new industries, as the top priority policy task for the 21st National Assembly. This was followed by labor market reform, such as labor market flexibility, at 57.2%, and welfare expansion and strengthening of the social safety net at 33.8%. The survey was conducted among 222 economic experts, including professors of economics or business administration at four-year universities nationwide.

In the labor market sector, the most urgent legislative tasks were identified as easing restrictions on flexible working hours (45%) and promoting the reform of wage systems centered on job and performance (44.6%). Experts also pointed out that reforming the minimum wage system and easing the rigidity of dismissal laws are necessary to create a competitive labor market. Additionally, 45.9% of respondents said that to modernize labor-management relations, replacement labor should be allowed during industrial disputes, the highest response rate.

Regarding the fiscal management policy that the 21st National Assembly should maintain, 41% of respondents answered that "fiscal expansion is necessary but should be kept to a minimum." Those who said maintaining balanced finances is necessary accounted for 27.5%, while 22.5% said fiscal expansion should be greater than the recent trend.

Opinions on the Highest Corporate Tax Rate and the Highest Inheritance Tax Rate (Data=Korea Employers Federation)

More than half of the experts also agreed that the top rates of corporate tax and inheritance tax should be lowered. The Korea Employers Federation explained, "While major countries competing in the global market have lowered their top corporate tax rates, South Korea actually raised its top rate from 22% to 25% in 2018, which seems to have reduced corporate tax competitiveness." It added, "In the case of inheritance tax, South Korea imposes a high rate and a premium valuation on major shareholders during business succession, making the burden among the highest in the world."

Meanwhile, experts felt the economic shock caused by the novel coronavirus disease (COVID-19) was about 49.5% greater than the global financial crisis and 14.8% greater than the IMF foreign exchange crisis. The prevailing view was that it would take one to two years for economic conditions to recover to the pre-COVID-19 state.

Regarding the time required to recover to the pre-COVID-19 state, 41.9% of respondents said "one to two years," the highest proportion, while 26.1% said "six months to one year." Those who found it difficult to estimate how long recovery would take accounted for 18.5% of all respondents.

This content was produced with the assistance of AI translation services.