"Ruling Party Must Abandon the Idea of Being Always Right"…Former Deputy Prime Ministers Criticize Amid Ruling Party's Series of Setbacks

LH Scandal..."It's Impossible to Plug Every Hole with Economic Theory"
Tax Burden Relief Needed for One Household One Home
Fiscal Input as Last Resort, Targeted Support Is Right

[Asia Economy Reporter Jang Sehee] "The ruling party must abandon the belief that they are always right."

Former deputy prime ministers have voiced sharp criticism toward the government and ruling party, which have repeatedly made blunders such as real estate hypocrisy and a rapid surge in national debt. Jin Nyeom, Han Duck-soo, and Jeon Yoon-chul, former deputy prime ministers and ministers of strategy and finance, pointed out in a phone interview with Asia Economy on the 1st that the ruling party's unilateral actions are a bigger problem than the government itself.

These former deputy prime ministers sharply criticized the recent string of real estate setbacks originating from the ruling party, saying they fail to properly see the reality of housing. The implementation of the three lease laws, comprehensive real estate tax, official land price hikes, and the Korea Land and Housing Corporation (LH) scandal have intensified calls for regime judgment. They emphasized the need to clearly distinguish the roles of the public and private sectors. They also advised that, as the ruling party's policy leadership grows stronger, the executive branch must be able to operate independently.

Raising Taxes Does Not Necessarily Eliminate Speculation

They criticized the government and ruling party's response to the recent LH scandal as misguided. Han Duck-soo, former deputy prime minister and prime minister during the Roh Moo-hyun administration, said, "It is impossible to plug every hole with economic theory," adding, "Raising tax burdens does not necessarily eliminate speculation."

Earlier, the government decided to raise the land transfer tax rate by 20 percentage points and introduce loan-to-value (LTV) regulations on all non-housing collateral loans across financial institutions to prevent recurrence of the LH scandal. Han criticized the excessive real estate tax regulations and said there should be supplementary measures for single-homeowners. The ruling party has been strengthening tax and loan regulations to curb unearned income from real estate. According to the official land price realization roadmap, the official land price is planned to be raised up to 90% by 2030.

He emphasized, "For single-homeowners who feel the tax burden from strengthened housing regulations, it is necessary to ease the tax burden," adding, "The government should only supply housing to low-income groups, and the rest should be handled by the private sector."

Fiscal Spending as a Last Resort... The Healthier, the Better

Jeon Yoon-chul, former deputy prime minister and the last economic chief under the Kim Dae-jung administration, emphasized, "For a country like ours without natural resources, the healthier the fiscal condition, the better," adding, "Fiscal spending should be the last resort." Jeon said, "When spending money, it should be directed as productively as possible to necessary areas," and "Selective support is desirable." Since COVID-19, the government has injected 81.7 trillion won through five supplementary budgets to fully respond to the economy. Some predict that if variables such as 'universal consolation payments' and 'loss compensation systems' emerge after economic recovery, national debt could reach 1,000 trillion won.

He also advised that the changed employment market due to COVID-19 should be well captured and proactively addressed. Jin Nyeom, former deputy prime minister, said, "The employment market is also changing due to COVID-19," and "We need to prepare for post-crisis responses starting now." He added, "The focus should be not just on creating jobs but on enhancing people's capabilities through education and training using artificial intelligence (AI) and other technologies."

Regarding Deputy Prime Minister Hong Nam-ki, they emphasized that he must demonstrate his presence as the economic commander. Han said, "If necessary, Deputy Prime Minister Hong should step forward and persuade the president to further block political winds," while Jeon said, "Bureaucrats should be neutral, thinking only of the people and the economy," and "Deputy Prime Minister Hong must take the lead and drive economic policy."

On the day he became the longest-serving deputy prime minister, Hong announced, "By 2025, we will commercialize more than five core products used in electric vehicle batteries," and "We will support 10 billion won this year for the development of next-generation power semiconductor technology based on three core materials including silicon carbide (SiC)." Regarding the economic outlook, he said, "Thanks to global vaccine distribution and manufacturing economic vitality, the global economy is expected to experience a sharper upturn this year than anticipated," adding, "Our economy is also lighting a hopeful upward trend for recovery and rebound."

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