[Reporter’s Notebook] Even with Half-Measure 종부세 Relief, the Deputy Prime Minister for Economy Says "Thank You"

Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho (left) and Bank of Korea Governor Lee Chang-yong are attending the full meeting of the Planning and Finance Committee held at the National Assembly in Yeouido, Seoul, on the 1st. (Photo by Yonhap News)

[Asia Economy Reporter Geum Bo-ryeong] The National Assembly passed the amendment to the Comprehensive Real Estate Tax Act at the plenary session on the 1st. Deputy Prime Minister and Minister of Economy and Finance Choo Kyung-ho expressed his gratitude immediately after the resolution at the previously held Planning and Finance Committee plenary meeting, saying, "Thank you for processing it," but there were still regrets within the government and ruling party.

With the passage of this amendment, about 180,000 people, including temporary two-homeowners and the elderly, will see a slight reduction in their comprehensive real estate tax burden. However, the special deduction increase that raised the tax imposition threshold for single-homeowners from 1.1 billion KRW to 1.4 billion KRW only for this year ultimately ended in vain, excluding 93,000 individuals and 128,000 couples with joint ownership from the benefit. The government and the People Power Party lowered the special deduction increase to 1.2 billion KRW instead of 1.4 billion KRW, but the Democratic Party rejected it. Although a catastrophe was averted, criticism that it is a 'half-baked agreement' is unavoidable.

The process of handling the comprehensive real estate tax amendment is worth reflecting on as it foreshadowed the 'intense power struggle' in the first regular session of the National Assembly since the launch of the Yoon Seok-yeol administration. In a political landscape where the ruling party is in the minority, the ruling party must push forward reform legislation early in its term, while the major opposition party cannot afford to lose the initiative. If this continues, the bills in this regular session are likely to end up half-finished like the comprehensive real estate tax amendment. It is clear that only the people struggling with high inflation, high interest rates, and high exchange rates will suffer more. Deputy Prime Minister Choo's "thank you" can be seen as a kind of 'lip service' considering that further discussions between the ruling and opposition parties are needed until the plenary session on the 7th.

Now is not the time for the ruling and opposition parties to fight for dominance in the regular session. It is the 'timing' to overcome difficulties through legislation aimed at economic recovery for the people, not just talking about the '22nd National Assembly's livelihood legislation' or the 'Top 100 legislative tasks.' The People Power Party, which holds a key role in state administration, must use political skills to lead bipartisan agreement, and the Democratic Party should not obstruct the government with unconditional opposition. Both parties must keep in mind that missing the policy timing will result in greater costs in the future.

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