Farewell to promises of financial liberation, embracing fiscal guardianship
Posted April. 10, 2024 07:48,
Updated April. 10, 2024 07:48
Farewell to promises of financial liberation, embracing fiscal guardianship.
April. 10, 2024 07:48.
.
During the intense general election campaign leading up to April 10, both the ruling and opposition parties launched a barrage of criticisms. While their angles and content varied, they converged on one phrase: "If the other party wins, the nation will end up facing problems akin to those of Argentina or Venezuela." This statement wasn't an exaggeration, given the foreboding promises made by both sides. These promises, including tax cuts, district developments, and cash handouts, could pose significant challenges if they were to be realized. According to the Citizens Coalition for Economic Justice, a staggering total of 2,239 campaign promises were made by both sides, with a planned budget allocation of at least 554 trillion Korean won (KRW). The campaign was particularly saturated with pledges of cash handouts, with each party seemingly trying to outdo the other. For instance, if one party proposed partial rail undergroundization, the other countered with a plan for full undergroundization. Similarly, promises extended by one party to provide free weekday lunches for senior citizens, with the other party pledging to include weekends as well. It was akin to a high-stakes gambling game, with each side escalating their commitments. Ultimately, the opposition Democratic Party considered 13 trillion won a minimal funding requirement for restoring livelihoods, while the ruling People Power Party audaciously proposed lowering the value-added tax. This move could significantly impact the national taxation system.
The government has been diligently tracking the promises made during the campaign. From the beginning of the year until the end of March, 24 nationwide debates were conducted to enhance ordinary citizens' livelihoods. Out of the multitude of promises made during these discussions, the government managed to identify and prioritize 240 tasks for follow-up. This shows the government's commitment to fulfilling its obligations despite the challenges.
All those "no questions asked" campaign promises, lacking concrete plans for financing or raising concerns for tax deficits, now rest on the doorstep of the Ministry of Economy and Finance, the guardian of the national coffers. President Yoon recently praised the ministry's bold decision to exempt taxes on childbirth promotion allowances companies provide to their employees. However, this commendation wasn't met with enthusiasm by the ministry and other government ministries, as it signaled potential pressure to concede "boldly." Failure to meet these demands adequately may result in criticism of the ministries, with claims that such decisions are beyond their jurisdiction.
The ministry is gearing up, albeit seemingly insufficiently, for upcoming tasks. Minister Choi Sang-mok mentioned in an executive meeting in early April that the time for the ministry’s action is near. The impending tasks include the fiscal strategic meeting scheduled for May and the announcement of tax law revisions in July. The ministry must conduct a thorough review process, prioritizing crucial issues and selecting key initiatives to fulfill campaign promises within budget constraints while identifying opportunities for future growth engines.
What's concerning is that under the current administration, the ministry has seldom been perceived as resolutely guarding the national coffers. The ministry made a stark about-face to accommodate the Presidential Office, easing transfer income tax rules for major shareholders of listed companies and announcing the elimination of financial investment income tax. Numerous charging systems were hastily revised within a month or two upon the President's request. The Presidential Office presents the bait, and the ministries uncritically take it, implementing changes without undergoing even the most basic review.
The Ministry of Economy and Finance must step up and assert its authority if it wishes to maintain its pride and confidence as a government entity overseeing the nation's economic policies and fiscal health. It's time to adopt a more cautious approach and enact fiscal rules to limit the fiscal deficit to within 3% of the nation's GDP. The era of promising unchecked spending must come to an end. It's time to secure our coffers once again, resisting the temptation to deplete them.
韓國語
During the intense general election campaign leading up to April 10, both the ruling and opposition parties launched a barrage of criticisms. While their angles and content varied, they converged on one phrase: "If the other party wins, the nation will end up facing problems akin to those of Argentina or Venezuela." This statement wasn't an exaggeration, given the foreboding promises made by both sides. These promises, including tax cuts, district developments, and cash handouts, could pose significant challenges if they were to be realized. According to the Citizens Coalition for Economic Justice, a staggering total of 2,239 campaign promises were made by both sides, with a planned budget allocation of at least 554 trillion Korean won (KRW). The campaign was particularly saturated with pledges of cash handouts, with each party seemingly trying to outdo the other. For instance, if one party proposed partial rail undergroundization, the other countered with a plan for full undergroundization. Similarly, promises extended by one party to provide free weekday lunches for senior citizens, with the other party pledging to include weekends as well. It was akin to a high-stakes gambling game, with each side escalating their commitments. Ultimately, the opposition Democratic Party considered 13 trillion won a minimal funding requirement for restoring livelihoods, while the ruling People Power Party audaciously proposed lowering the value-added tax. This move could significantly impact the national taxation system.
The government has been diligently tracking the promises made during the campaign. From the beginning of the year until the end of March, 24 nationwide debates were conducted to enhance ordinary citizens' livelihoods. Out of the multitude of promises made during these discussions, the government managed to identify and prioritize 240 tasks for follow-up. This shows the government's commitment to fulfilling its obligations despite the challenges.
All those "no questions asked" campaign promises, lacking concrete plans for financing or raising concerns for tax deficits, now rest on the doorstep of the Ministry of Economy and Finance, the guardian of the national coffers. President Yoon recently praised the ministry's bold decision to exempt taxes on childbirth promotion allowances companies provide to their employees. However, this commendation wasn't met with enthusiasm by the ministry and other government ministries, as it signaled potential pressure to concede "boldly." Failure to meet these demands adequately may result in criticism of the ministries, with claims that such decisions are beyond their jurisdiction.
The ministry is gearing up, albeit seemingly insufficiently, for upcoming tasks. Minister Choi Sang-mok mentioned in an executive meeting in early April that the time for the ministry’s action is near. The impending tasks include the fiscal strategic meeting scheduled for May and the announcement of tax law revisions in July. The ministry must conduct a thorough review process, prioritizing crucial issues and selecting key initiatives to fulfill campaign promises within budget constraints while identifying opportunities for future growth engines.
What's concerning is that under the current administration, the ministry has seldom been perceived as resolutely guarding the national coffers. The ministry made a stark about-face to accommodate the Presidential Office, easing transfer income tax rules for major shareholders of listed companies and announcing the elimination of financial investment income tax. Numerous charging systems were hastily revised within a month or two upon the President's request. The Presidential Office presents the bait, and the ministries uncritically take it, implementing changes without undergoing even the most basic review.
The Ministry of Economy and Finance must step up and assert its authority if it wishes to maintain its pride and confidence as a government entity overseeing the nation's economic policies and fiscal health. It's time to adopt a more cautious approach and enact fiscal rules to limit the fiscal deficit to within 3% of the nation's GDP. The era of promising unchecked spending must come to an end. It's time to secure our coffers once again, resisting the temptation to deplete them.
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