[Q&A] "We will inspect companies that have exhausted special extended work hours and prepare additional measures"

'2020 Second Half Economic Policy Direction'

Bang Gi-seon, Deputy Minister for Economic Policy at the Ministry of Economy and Finance, is giving a detailed pre-briefing on the "2020 Second Half Economic Policy Direction" at the Government Complex Sejong on the 29th of last month.

[Sejong=Asia Economy Reporter Joo Sang-don] The government has decided to prepare additional measures for companies that have already exhausted the special extended working hours limit in the first half of the year due to the impact of the novel coronavirus infection (COVID-19).

On the 29th of last month, the Ministry of Economy and Finance announced this during a detailed pre-briefing on the "2020 Second Half Economic Policy Direction" at the Government Complex Sejong.

At the briefing, Deputy Vice Minister Bang Ki-seon of the Ministry of Economy and Finance said, "There are companies that have heavily used up the 90-day special extended working hours limit in the first half. Therefore, the Ministry of Employment and Labor will quickly inspect the actual conditions of these companies," adding, "Based on this, we will assess the extent of additional supplementary measures needed and announce further measures accordingly."

The following are key excerpts from a Q&A session between Deputy Vice Minister Bang and other Ministry of Economy and Finance officials and the press corps.

▲Ha Kyung-jung prepared economic policies on the assumption that the spread of COVID-19 would subside. Is there an emergency plan in case of a second wave?

=Deputy Vice Minister Bang Ki-seon: Our economic outlook for the second half of this year is based on the premise that quarantine issues will be resolved. We clearly recognize that additional downside risks exist. If the situation worsens, we will prepare additional measures. We are continuously communicating with the quarantine authorities and updating the COVID-19 situation.

▲The government forecasted 0.1% growth for the Korean economy this year through the second half economic policy direction. Does this figure reflect the effects of the supplementary budget and the policy measures?

=Bang Ki-seon: Yes, the figure fully reflects the effects of the (third) supplementary budget and the policy measures in the second half economic policy direction.

▲Why was the 70% individual consumption tax cut on passenger cars, which ends at the end of June, terminated, and instead a 30% cut extended until the end of the year?

=Kim Tae-joo, Director General of Tax Policy Coordination: Amending the law to extend the 70% cut on passenger car individual consumption tax involves various uncertainties. If the law is not amended by the end of June, consumers might delay purchases, causing a freezing effect. Considering this, we revised the enforcement decree. However, I want to clarify that we have no plans to reinstate the 70% cut through a legal amendment in the second half.

▲Although the rate of the passenger car individual consumption tax cut was reduced, was the decision to maintain a 30% cut based on the view that the tax cut stimulates consumption?

=Kim Tae-joo: Looking at consumption trends, the automobile sector accounts for a significant portion of consumption. Consumption in the automobile sector has been relatively strong. We believe that the previous individual consumption tax cuts have had a positive impact on consumption. Through this (tax cut), we expect consumption and investment capacity to revive somewhat in the second half, which is necessary for our economy to maintain a sustainable growth trend. Therefore, we are pursuing additional individual consumption tax cuts.

▲You mentioned that regulatory innovation plans for the top 10 major industries will be announced sequentially. Will discussions include regulations on metropolitan area site restrictions?

=Bang Ki-seon: In the industrial complex sector, a typical regulation often considered is the metropolitan area issue. Besides metropolitan area site restrictions, there are various factors such as the types of businesses allowed in industrial complexes and the proportion of commercial facilities. We have been trying to shift to a negative list approach, specifying which industries are not allowed, but this requires an overhaul of the legal system, which takes time. You can consider this as part of our regulatory relaxation efforts. However, the sequential regulatory innovation mentioned in the second half economic policy direction does not specifically refer to metropolitan area site restrictions.

▲You said that a "Plan to Strengthen Government Bond Issuance and Management Capabilities" will be announced in October. Could you explain in detail?

=Lee Jong-wook, Director General of the Treasury Bureau: Currently, the National Assembly controls the total issuance volume when government bonds are issued. We propose that the National Assembly regulate only the net issuance amount, allowing the bond issuing authority more flexibility in exchanges and other market-based operations. This requires a legal amendment, so we plan to prepare a bill and submit it to the National Assembly. Please understand that this is the policy direction we are pursuing.

▲You announced a "comprehensive package" to expand the attraction of returning companies. What are the expected effects?

=Bang Ki-seon: It is not simply a matter of remaining complexes returning. There are various regulatory issues beyond site problems, and some policy support is needed for locations. If the investment attraction team can help resolve site issues together, we can say that it will be more effective.

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