'Collaborative Governance'... COVID-19, Balanced Development, Reshoring, etc., 'Fair Economy' Remains Uncertain

Entering the Search for Common Denominators in General Election Promises & Party Platforms

[Image source=Yonhap News]

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea and the People Power Party (the new name of the United Future Party) have decided to promote 'policy cooperation' and have begun searching for bills on which they can realistically agree. Priority will be given to quarantine measures and livelihood support to overcome the COVID-19 crisis, with a high possibility of agreement on bills supporting youth and women, balanced regional development, and reshoring (support for companies returning from overseas).

Since the People Power Party has included economic democratization as a new basic policy, the Democratic Party is expected to bring so-called 'fair economy' bills such as amendments to the Commercial Act and the Fair Trade Act to the table. However, the People Power Party maintains the view that these could increase the burden on companies, making the outlook uncertain.

On the 3rd, a Democratic Party official said, "We are trying to identify commonalities, even if not very specific, among the election pledges of both parties," adding, "We can discuss COVID-19 related quarantine and livelihood bills, and in the economic field, reshoring support bills have already been proposed by both parties, so we can talk about those." A People Power Party official also said, "We are starting to look for them now. Health and livelihood support bills will likely be prioritized."

Democratic Party leader Lee Nak-yeon proposed to Kim Jong-in, the United Future Party's emergency committee chairman, to legislate common or closely aligned items from the election pledges and party platforms of both parties, and Kim reportedly agreed in principle the day before.

The United Future Party has proposed the 'COVID-19 Crisis Escape Livelihood Support Bill' as its first party-backed bill in the 21st National Assembly. Among these, the extension of family care leave is seen as urgent and is likely to be passed first, as the government and ruling party also view it as a priority. The bill also includes exemptions from wedding cancellation penalties, tuition refunds, and compensation for losses due to quarantine-related closures. Additionally, bills to strengthen penalties for non-compliance with quarantine guidelines and other measures to overcome COVID-19 are expected to be addressed.

Choi In-ho, the Democratic Party's chief spokesperson, told reporters the day before, "Legislation related to balanced regional development can be discussed and agreed upon at any time." Both the Democratic Party and the People Power Party have pledged in their election manifestos to strengthen fiscal soundness through raising local allocation tax rates. The Democratic Party has pledged to enact the 'Regional Small and Medium Enterprise Promotion Act,' while the People Power Party has pledged the 'Special Act on Development of Population Declining Areas,' with their members already having proposed related bills. However, negotiations on relocating the administrative capital do not seem smooth. Leader Lee has expressed his intention to address the relocation through a balanced development special committee, but the People Power Party holds a negative stance.

Common ground can also be found in youth and women's issues. The Democratic Party has proposed lowering interest rates and expanding loans as youth housing pledges, while the People Power Party has proposed support measures for newlywed couples' rental deposits. Strengthening penalties for hidden cameras and stalking, which have become social issues following the 'Nth Room case,' may also be urgent cooperation bills.

In economic pledges, the Democratic Party emphasizes coexistence and fairness between large corporations and SMEs, while the People Power Party focuses on corporate vitality through corporate tax cuts, showing a significant gap. However, both parties find common ground in strengthening manufacturing competitiveness and supporting innovative industries, notably the reshoring support bill prioritized by the government. A Democratic Party official said, "Since the opposition party has also proposed bills for companies returning domestically, it can be a cooperative bill."

More than ten related bills have already been proposed by lawmakers from both parties, with key points including temporary extensions of income and corporate tax reductions for reshoring companies. The government plans to strengthen package-type support including location and subsidies in addition to tax benefits.

Amendments to the Commercial Act and Fair Trade Act, which include improving the governance of large business groups, strengthening regulations on internal transactions, and adjusting investigation authority on collusion, are key economic bills. The business community strongly opposes them, calling them 'corporate straitjackets.' The People Power Party's new basic policy includes "strict punishment for unfair acts among all economic actors participating in the market and establishing an institutional foundation for coexistence and harmony between large corporations and SMEs." However, it largely views the amendments to the Commercial Act and Fair Trade Act negatively. A People Power Party official said, "Basically, we see it as regulatory strengthening. The economy is struggling due to COVID-19, and the basic thought is whether this narrows the room for companies to operate."

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