The following are key measures from the government’s economy management plan to be carried out by newly inaugurated Finance Minister Choi Kyung-hwan. The plan mostly focuses on boosting domestic demand, stabilizing people’s livelihoods and reforming the country’s economic structure.
Expansionary macroeconomic policy
– Injects 40.7 trillion won in fiscal and financial support to boost economic recovery
– Strengthens fiscal support by 11.7 trillion won during the second half
– Expands policy financing support for small- and medium-sized companies through state-run banks by 10 trillion won
– Draws up a budget for 2015 as expansionary as possible to support economic recovery
– Improves regulations on foreign currency transactions (July)
Household income
– Plans to introduce tax schemes aimed at encouraging companies to spend a certain ratio of their profits on employment and investment
– Plans to encourage companies to hike salaries of their workers through tax incentives
– Plans to draw up measures aimed at encouraging companies to pay out dividends to investors (August)
– Expands income deductions on check cards and cash receipts
– Extends tax deductions on credit card spending by two years
Corporate investment
– Pursues large-scale infrastructure construction led by private investors
– Raises lending through the foreign currency stabilization fund to businesses to $15 billion from US$10 billion
– Improves systems to make business inheritance easier for small companies
Housing market and household debt
– Adjusts the loan-to-value ceiling to a uniform rate of 70 percent
– Adjusts the debt-to-income ceiling to a uniform rate of 60 percent
Livelihood
– Stabilizes prices to help people in their daily lives and strengthens the distribution structure for widely consumed goods
– Draws up measures to stimulate competition in communications sector and lower the burden from communication fees (November)
Extra measures
– Provides support for companies to turn irregular workers into regular employees by picking up salary increases
– Pushes for strong reform of the debt-ridden public sector
– Nurtures tourism, medical and other promising service sector businesses
(Yonhap)
