[Newsmaker] Economic team blasted for inconsistency

By Kim Yon-se
  • Published : Mar 6, 2014 - 21:08
  • Updated : Mar 6, 2014 - 21:08
The Park Geun-hye administration appears to be discontented with the economic policies created by Deputy Prime Minister and Finance Minister Hyun Oh-seok.

This was suggested through the remarks of Prime Minister Chung Hong-won on Thursday, who claimed that the state economic policy team has failed to gain public credibility due to its inconsistency in carrying out major policies.

During a ministerial meeting for national policy fine-tuning, Chung criticized the Finance Ministry’s recent reversal of its taxation policy. Hyun also participated in the gathering at the Seoul Government Complex.

Mentioning the ministry’s change of position during the past week on taxing income from monthly housing leases, Chung said, “The reversal of government policies has been linked to social woes and the public’s distrust in the administration.”
Finance Minister Hyun Oh-seok (left) and Financial Services Commission Chairman Shin Je-yoon. (Yonhap)

He also said it would be better for the government not to unveil or push for any particular policies without garnering public support.

Market insiders say that the revised plan for taxing housing rental income, for instance, would be beneficial neither to monthly tenants nor small-sized housing lease providers. “The Finance Ministry has failed to increase the number of beneficiaries of non-taxable income,” said a real estate broker.

In addition, Minister Hyun has been criticized for taking a lukewarm attitude toward the issue of mounting consumer debt.

Though economists have issued warnings about the household debt worth 1 quadrillion won ($900 billion), recent countermeasures unveiled by the Finance Ministry and financial regulators have been deemed a watering down of past measures.

“Over the past few years, the government promoted active private consumption by easing rules on credit card businesses in a bid to revitalize the economy. Policymakers should have curbed the financial sector’s reckless lending before the consumer debt began to hamper the GDP growth,” said an analyst at Hyundai Securities.

Last year, even some lawmakers of the ruling Saenuri Party said that Hyun should be held accountable for incurring public anger over the government’s taxation policy.

The proposed revision to the 2013 tax code, unveiled by the Finance Ministry, sparked a backlash from a variety of sectors, as the change would raise the tax burden of those who in the middle-income bracket starting from this year.

Rep. Cho Won-jin of the Saenuri Party earlier said that the present economic policy team was ill-equipped to deal with the current global economic difficulties.

Attention is being paid to whether President Park will replace her senior economic policymakers, including Hyun.

By Kim Yon-se (