South Korean companies should expand their investments and boost the nation’s economy with their cashable assets that have more than doubled over the last seven years, a ruling party lawmaker said Wednesday.
According to Rep. Kim Doo-kwan of the Democratic Party of Korea, cashable assets of Korean companies rose 76 percent from 337 trillion won ($298 billion) in 2009 to 594 trillion won last year, citing the reports from the Bank of Korea.
Cashable assets refer to cash, financial products with a three-month maturity period and short-term investment assets, which are net income without being reinvested.
In the last seven years, Korean companies’ total net income stood at 774 trillion won and they reinvested only 67 percent of that, according to Rep. Kim.
Under the former Park Geun-hye administration, the government tried to encourage more investment through a tax system that additionally imposed tax on some of the corporate money not used for investments, wage increases or dividends. But, the system did not significantly lead to wage increases or investment in equipment, according to Kim.
The current Moon Jae-in administration complemented the tax system in the way of giving more tax benefits to companies that hire more low-income employees.
“As the government is making efforts to create more jobs to combat the tight job market, companies should also make efforts to invest in equipment and hiring with their cashable assets,” he said.
By Shin Ji-hye (firstname.lastname@example.org)