Ten-Year Business Community Wish: Service Development Act, Key Focus of the Democratic Party

Repeated Legislative Failures on Medical Commercialization Controversy
Chamber Proposes Negative System Legislation Followed by Detailed Industry Discussions

Hong Nam-ki, Deputy Prime Minister and Minister of Economy and Finance, is giving a lecture on the topic of "Trends and Policy Directions of the Service Industry" at the "Service Industry Federation Early Dinner Lecture" held at the Press Center in Jung-gu, Seoul, on July 5, 2019. Photo by Kang Jin-hyung aymsdream@

[Asia Economy Reporter Park Cheol-eung] The Democratic Party of Korea's Basic Act on Service Industry Development, which it aims to promote under the banner of 'economic innovation,' has long been a wish of the business community. As the name of the bill suggests, it applies to any industry except those producing goods such as agriculture, forestry, fisheries, or manufacturing. It is broadly applicable not only to healthcare but also to tourism, distribution, finance, logistics, gaming, and media sectors.

The Korea Chamber of Commerce and Industry expressed regret in a legislative direction report submitted to the National Assembly in September last year, stating, "Although the bill comprehensively stipulates the establishment of basic plans for service industry development, support for startups and research and development (R&D), its enactment has been continuously delayed due to debates over whether to include the healthcare sector."

It further stated, "Since both ruling and opposition parties agree on the enactment of the law, we proposed adopting a negative list approach for legislation and separately discussing the applicability to detailed industries during the policy formulation stage." This is interpreted as a suggestion to first prepare the bill in broad terms and then decide whether to include the healthcare sector, as the controversy over healthcare commercialization has hindered overall service development.

So far, the Democratic Party has maintained the position that commercialization should not be allowed under the pretext of service industry development, opposing profit-oriented hospitals, telemedicine, and permitting hospitals to operate hotel businesses, while conservative opposition parties have countered that excluding the service industry would result in a half-baked bill.

The bill proposed by Democratic Party lawmaker Lee Won-wook in July explicitly states, "This law does not apply to matters stipulated in the Medical Service Act, the Pharmaceutical Affairs Act, the National Health Insurance Act, and the National Health Promotion Act." In contrast, the bill by People Power Party lawmaker Chu Kyung-ho states, "If there are special provisions in other laws such as the Medical Service Act and the National Health Insurance Act, those laws shall prevail."

Regarding this, Jeong Yeon-ho, senior expert of the National Assembly's Planning and Finance Committee, noted in a review report on Chu's bill, "It appears to be intended to preemptively block controversies," but added, "There may be debates about the extent to which the provisions of individual laws that qualify as 'special provisions of other laws' apply. For example, if the provisions maintaining the public nature of medical services in the Medical Service Act are interpreted as not being special provisions of other laws, policies undermining public health and medical services could be implemented under this law."

The government establishes a basic plan for service industry development every five years, and ministers of related departments set annual implementation plans each year. It also provides a basis for supporting R&D through funding or tax incentives and formulates policies to actively utilize information and communication technology in the service sector. It can designate specialized institutions for the service industry, high schools, and universities for support, and establish specialized research centers.

According to a 2015 survey of service companies conducted by the Korea Chamber of Commerce and Industry, 34% of respondents said they would increase investment if the Service Industry Development Act were enacted.

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