[Second Half Economic Policy] Preventing the 'Vicious Cycle' of Local Extinction... Smart Local Universities' 'Selection and Concentration'

Economic Policy Direction for the Second Half of 2023
Focused Support for Regional Universities Demonstrating Talent Development Competitiveness
Expansion of Special Account to 9.7 Trillion Won

Hanbat National University operates and promotes government-supported regional university specialization projects such as the ▲IT Convergence Human Resources Development Group, ▲Design Plus Firstmover (DESIGN+ Firstmover) Group, and ▲China Business Specialist (CBS) Group to foster field-oriented professional talent and strengthen employment capabilities. Provided by Hanbat National University

The government has launched efforts to strengthen the competitiveness of regional (specialized) universities as part of educational reforms aimed at breaking the vicious cycle of local universities gradually closing and regional extinction worsening due to the decline in school-age population. A strategy of selection and concentration has been adopted to provide focused budget support to regional universities that demonstrate capabilities in nurturing talent in advanced fields.

According to the '2023 Second Half Economic Policy Direction' announced on the 4th, the government plans to select outstanding regional (specialized) universities with the ability to cultivate talent in advanced fields and provide full support in areas such as finance and taxation. To this end, the current 9.7 trillion won scale of the Higher and Lifelong Education Special Account will be expanded, and the 'Glocal University Project' will be launched in earnest, supporting up to 100 billion won per university for 30 non-capital area universities over five years. A government official explained, "Both the regions and universities must survive together, and to increase the efficiency of resource allocation, concentrated support should be strengthened for universities that have proven their viability and competitiveness."

The tax burden on universities will also be eased. Going forward, when a university sells assets such as income-generating real estate and acquires new income-generating assets as replacements, the taxation on capital gains from the disposal of income-generating assets will be deferred until the disposal of the new assets (a system that allows companies to postpone tax payments to facilitate smooth fund management). Previously, universities were required to defer capital gains tax payments for three years and pay in installments over three years, but this change aims to maximize universities' financial capacity and facilitate investment.

October 'Comprehensive National Pension Operation Plan' to be Established... Measures to Improve Returns and Expand Credit System

In addition to educational reform, pension and labor reforms aimed at improving economic structure will be continuously pursued. To enhance the sustainability of the National Pension, a 'Comprehensive National Pension Operation Plan' will be established in October to announce measures to improve the National Pension's operational performance and address blind spots. The plan will include reforms to the performance-based pay system for pension investment managers to increase fund operation returns, as well as expansions of credits for childbirth and military service to enhance pension accountability. Credits are a system that additionally recognizes periods of National Pension subscription to broaden pension benefits. Currently, only the birth of a second child (12 months) and third or subsequent children (18 months) are recognized for National Pension subscription periods, but the plan is to include the first child as well and extend the recognized period for military service (6 months).

Furthermore, reforms to restructure the dual labor market and prevent serious industrial accidents will be detailed. Under the policy to reduce actual working hours, the government will prepare supplementary measures for working hour reforms considering difficulties in the field and draft legislation to protect the rights of workers in various employment forms. To enhance the effectiveness of serious accident prevention, a plan will be prepared by the fourth quarter to train safety management professionals and expand safety managers in vulnerable sectors such as small and medium-sized enterprises and mid-sized companies.

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