Park vows public sector reform

By Korea Herald
  • Published : Feb 20, 2014 - 21:08
  • Updated : Feb 20, 2014 - 22:56
President Park Geun-hye said Thursday that her drive to reform public organizations would focus not only on reducing their debts and ending lax management but also overhauling their duties to help them focus on core responsibilities.

“Besides debt reduction and (ending) lax management, we have to focus on increasing productivity,” Park said during a joint policy briefing by the Finance Ministry, the Fair Trade Commission and the Financial Services Commission. “We have to carry out an all-out review of the functions of public institutions in phases and get them to focus on core duties.”

Park also said that public corporations should sell off their assets for debt repayment if necessary, and asked officials to make sure that those assets are sold for the right prices as they are public properties purchased with taxpayer money.

She called for increasing the values of such assets before sell-offs.

Park also warned against any attempts to derail the reform drive.

“If there are attempts to resist reform in order to protect vested rights, we have to respond to them with principles,” Park said. “We are in a situation where everyone is tightening their belts. If they try to ensure their individual interests and vested rights, people won’t accept that.”

During the meeting the Finance Ministry said it is scheduled to hold a series of meetings with the religious community to fine-tune the details of the planned taxation on religious leaders including Protestant pastors, Catholic clergymen and Buddhist monks.

Deputy Prime Minister and Finance Minister Hyun Oh-seok confirmed the government’s will to levy taxes on the religious community.

In the joint report, one of the key agendas was fair taxation that takes public sentiment into consideration.

The ministry said in a statement that the government hopes to plug the loopholes in the state tax system by introducing taxation on the local religious sector. It also pledged to attain “transparency and equity” in taxation.

Hyun told a news briefing that the government plans to reach a consensus with the religious sector on mapping out taxation methods and naming the tax in the upcoming talks that are slated to start later this month.

Despite the government‘s determination, the policy is expected to invite another round of public criticism as to whether it would be really fair as the nature of the religious taxes may differ from that of those collected from regular income earners.

The Finance Ministry has allegedly decided to classify the money from donations to pastors and monks as “extra income.”

In the wake of a strong backlash from some religious lobbies, the Finance Ministry has shifted from its earlier position of regarding the money as “labor income.”

There are currently more than 360,000 priests, monks and other members of religious orders in Korea.

Meanwhile, during the briefing by the Financial Services Commission, President Park said it is necessary for the authority to introduce more stern sanctions against financial firms, which leak consumer data.

She said that “business shutdowns would be required” when financial firms breached the rules on protection of customers’ private information.

She also reiterated the government’s plans to revamp state-controlled agencies this year. “Should there be attempts to resist reform to protect their vested rights, (the administration) will respond with principle,” she told the ministers.

For the antitrust regulatory segment, Park instructed the Fair Trade Commission to “root out (big businesses’) unethical practices bullying subcontractors.”

FTC officials said the regulator was ordered by the presidential office to publicize the unfair deals between conglomerates and suppliers every six months.

By Kim Yon-se and news reports (