Finance minister nominee Bahk Jae-wan said the fight against inflation will stay as the priority with focus on flexible macroeconomic measures, revealing his intention to maintain the policy stance currently in place.
Answering questions at the parliamentary confirmation hearing on Wednesday, Bahk said he will try to make people in the middle class and low-income brackets feel the improving business sentiment through more price control measures and jobs.
“Price control and job creation will be at the center of economic policies. I will strive to come up with creative and market friendly measures, such as nurturing of budget airliners, to prevent rising costs creeping up as burdens on households,” Bahk said.
Finance Minister nominee Bahk Jae-wan prepares for answers during a parliamentary confirmation hearing in Seoul on Wednesday. (Park Hyun-koo/The Korea Herald)
He said the 3 percent inflation target set by the government “would be tough to make,” hinting for an upward adjustment of the target rate when the ministry releases economic strategies for the second half at the end of June.
Bahk, minister of employment and labor, was designated by President Lee Myung-bak to replace Finance Minister Yoon Jeung-hyun on May 6.
Along with four other minister designates, he is subject to parliamentary confirmation hearings this week to take the post but is not required to gain approval by the National Assembly.
He showed strong support of the planned corporate tax cut scheduled for next year. The Lee administration had planned to cut corporate tax rate from 22 percent to 20 percent starting 2012. Economists forecast the top 0.1 percent of firms in terms of asset would save about $3 billion in tax, making business more attractive for foreign corporations.
Bahk had earlier expressed his support for the Lee administration’s tax reduction plans. “It (tax reduction) is the symbol of the Lee Myung-bak administration’s policies, and we need to keep going in that direction for the sake of policy consistency and securing trust from the market,” Bahk said in a written response prepared in advance for the hearings. The idea is widely rejected by opposition lawmakers who argue that tax cuts are designed to benefit the haves.
Bahk said he is against cutting of oil taxes, a widely debated proposal after oil prices jumped to a 30-month high earlier this month. He said he will not consider lower tax rates for oil and added that such a decision should arrive after an analysis of various factors such as market conditions and tax reserves.
The finance minister nominee served as President Lee’s first senior secretary of political affairs. The former professor of public administration began his career as public servant in 2004 as the Grand National Party’s proportionate representative and served as chief secretary of the party in 2007.
By Cynthia J. Kim (email@example.com