Song Young-gil's "My Way" Crossing the "Right Line"... Criticism of "Absurd Apology Letter"

Democratic Party Supreme Council Member Kang Byung-won Slams "Real Estate Diagnosis and Prescription Both Flawed"

Song Young-gil, leader of the Democratic Party of Korea, and Yoon Ho-jung, floor leader, attended the Supreme Council meeting held at the National Assembly on the 14th, listening to the remarks of the Supreme Council members with serious expressions. Photo by Yoon Dong-ju doso7@

[Asia Economy Reporter Park Cheol-eung] Song Young-gil, leader of the Democratic Party of Korea, is showing behavior that seems to align with the conservative camp by distancing himself from the Blue House. While this is likely an attempt to "expand to the centrist bloc" as a lesson from last month's by-election defeat, criticism from the progressive camp is inevitable. Although the Blue House outwardly claims that "there is no conflict between the party and the Blue House," Song's "my way" approach is expected to increase tensions between the party and the Blue House as the presidential election approaches.

◆ Song Temporarily Refrains from Confronting the Blue House = At the Supreme Council meeting on the 17th, Song said, "President Biden, the second Catholic president after John F. Kennedy, and President Moon Jae-in, the second Catholic president in Korean history after 'Kim Dae-jung Thomas More,' will meet. The Pope is also encouraging them." By pointing out their shared religion, he offered well-wishes for the success of the Korea-US summit scheduled to be held in the United States on the 21st.

This is quite a different atmosphere from the remarks he made at the Blue House meeting on the 14th, which seemed to be made with determination. At that time, Song said, "The Biden administration in the U.S. is specializing in research on SMR (Small Modular Reactor) in the nuclear power sector for carbon neutrality." Although mentioned as an alternative after the nuclear phase-out policy, it was perceived as a view different from the government's policy direction since it involves continued use of nuclear power. He also made proposals regarding the establishment of new railway lines such as the metropolitan area express railway (GTX)-D line, which the government has already decided on. It seemed like an attempt to set a new milestone for the party-Blue House relationship, with the party taking the lead in policy and political affairs.

Regarding real estate issues, he put the "hot potato" on the table. At the first meeting of the Democratic Party's real estate special committee on the 12th, he mentioned that "property tax and capital gains tax are urgent issues." While expanding the scope of property tax reductions has already been raised as a consensus, capital gains tax on transaction profits is considered a sensitive matter. The six-month temporary suspension period for the capital gains tax surcharge ends next month, and there is a possibility of further adjustments. However, since the main regulation aims to prevent houses from being used as financial instruments, how much it can be eased remains uncertain. There may be a plan to raise the non-taxable capital gains tax threshold for single-homeowners from 900 million won, but this is linked to the high-priced housing criteria set by the comprehensive real estate tax (CRET) and others. The Blue House is also sensitive to adjustments in the CRET criteria. Lee Ho-seung, director of the Blue House policy office, recently stated in a media interview, "We need to be more cautious about the CRET. Considerations must be made regarding demand and tax fairness."

◆ Securing Party-Blue House Leadership Sparks Backlash from the Progressive Camp = Civic groups are strongly opposing the Democratic Party under Song's leadership, accusing it of attempting to retreat on real estate policies. The "Housing Rights Network," composed of organizations including People's Solidarity for Participatory Democracy, held a press conference in front of the National Assembly on the 13th, stating, "If the government and the Democratic Party reveal a lack of determination to stabilize housing prices through a misguided apology for retreating on real estate policies, they will face greater public judgment."

Discontent also erupted within the party. Kang Byung-won, a Supreme Council member of the Democratic Party, said at the Supreme Council meeting that day, "We need to reconsider the policies discussed by the party's real estate special committee." He expressed concern, saying, "They are discussing raising the CRET threshold, which is applied only to high-priced houses with official land prices of 900 million won or market prices of 1.5 billion won or more, and further postponing the suspension of the capital gains tax surcharge for multi-homeowners."

He added, "Reducing the tax burden on multi-homeowners and owners of high-priced houses goes against the basic direction of our government's real estate policy, which is to curb speculation and strengthen holding taxes." He pointed out, "The capital gains tax surcharge was postponed after the July 2020 measures and has not yet been implemented. Further postponement sends a message to multi-homeowners that they can win by holding out, which undermines market stabilization." He also delivered a direct blow, saying, "Both the diagnosis and the prescription are flawed."

The Blue House is cautious about viewing this as a party-Blue House conflict, stating that it is natural for the ruling party to take the lead toward the end of the term. Lee Cheol-hee, senior secretary for political affairs at the Blue House, said on MBC Radio's "Kim Jong-bae's Focus" that day, "It is the president's view that it is natural for the party to have considerable leadership." He added, "I have also received instructions from President Moon several times to respect the party's will and listen to their opinions, so there can be no conflict between the party and the Blue House." Meanwhile, Lee drew a line regarding some speculation that the Blue House has decided to retain Hong Nam-ki as Deputy Prime Minister and Minister of Economy and Finance, while replacing Yoo Eun-hye as Deputy Prime Minister and Minister of Education. Lee said, "From the atmosphere I feel and what I have confirmed, there is no personnel screening based on the premise of replacement."

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