Party, Government, and National Assembly "Regulatory Reforms Including Corporate Tax Cuts... Additional Discussions on Fuel Tax Reduction" (Comprehensive)

'New Government Economic Policy Direction' Council Meeting Held
Shift in Focus from Government-Led Growth to Private Sector-Centered Approach
Ruling Party: "Electricity Rate Increase Inevitable... Elderly Pension Also Under Review"

On the 15th, at the 3rd New Government Economic Policy Direction Party-Government Council held at the National Assembly, Deputy Prime Minister for Economy Choo Kyung-ho and People Power Party Floor Leader Kwon Seong-dong, along with other attendees, posed before the start of the meeting. Photo by Yoon Dong-joo doso7@

[Asia Economy reporters Hyunju Lee and Hyunji Kwon] On the 15th, the ruling party, the government, and the Presidential Office held a meeting at the National Assembly under the theme of "New Government Economic Policy Direction" and decided to boldly pursue regulatory reforms such as corporate tax cuts and investment tax credits. The focus was on reducing the corporate tax burden and restoring investment sentiment to promote growth led by companies.

At the opening remarks, Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho stated, "The government intends to boldly shift the economic management stance to overcome the current crisis and low growth," and announced four key priorities.

Deputy Prime Minister Choo said, "We will shift the core axis of economic management from the government to the private corporate market," adding, "We will promote structural reforms in five sectors: public, labor, education, finance, and services, prepare for future structural transformation by responding to the demographic crisis through scientific and technological industrial innovation, and also strive to provide productive welfare by strengthening social safety nets for vulnerable groups."

Specifically, the corporate tax cuts and investment tax credits under review by the ruling party and government were also mentioned. Minister of Trade, Industry and Energy Lee Chang-yang said, "Many opinions from the industrial sector, including corporate tax cuts and investment tax credits, have been reflected in the new government's economic policy direction, and we expect private investment to be greatly revitalized in the future," adding, "Considering the rising interest rates, we have also prepared strong investment tax credits that can offset this and respond to overseas markets."

To overcome the immediate difficult economic situation, the ruling party and government agreed to find solutions through discussions on fuel tax cuts and elderly pension systems.

People Power Party floor leader Kwon Seong-dong said in a press conference after the meeting, "I conveyed that a fuel tax cut that the public can feel, a final reduction, is necessary, and the government will comprehensively review overall tax revenue and other factors to make a decision."

Regarding the issue of electricity rate hikes, he said, "The Moon Jae-in administration suppressed it, but the government announced that electricity rate hikes are inevitable toward the end of its term," adding, "It is possible to suppress that part for price stabilization, but if that happens, market functions will be distorted." He continued, "The government will make an appropriate judgment, and electricity rate hikes are unavoidable."

Regarding the elderly basic pension system, he said, "I cannot disclose the results of the discussions, but today we will request additional supplementation regarding the government's position," adding, "The government has not done anything immediately, but will make a quick decision and announcement on that part."

Regarding the sunset clause of the safe freight rate system, he said, "There is a difference between the government's position and the Cargo Solidarity's announcement," adding, "We will investigate the reasons for the difference and decide whether to extend the sunset clause after further internal party discussions."

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