Deputy Prime Minister and Finance Minister Hyun Oh-seok said that the government would focus on boosting private investment and productivity in the services industry by helping them ease future business uncertainties.
The incumbent administration focused on devising policies and refining regulations in the first half of this year to promote fair market competition, or economic democratization.
During his two-day trip to provincial areas, Hyun told reporters that it was time to concentrate on “eliminating any market uncertainties” for the private sector so that companies could invest and hire in the latter half.
Hyun visited regional industrial zones to check up on their economic conditions and observe the effectiveness of government policies.
The government could devise a tax policy to help small and medium enterprises keep their long-term and highly skilled employees, the minister said in a meeting with executives of companies operating at Gyeongnam Techno Park in Changwon, South Gyeongsang Province.
It could also lower the inheritance taxes of SME owners who seek to pass their family businesses to the next generation, as part of efforts to sustain SMEs and boost exports.
“We will consider such tax measures to help SMEs maintain their employees,” Hyun said, acknowledging that smaller companies faced difficulties in keeping staff, who often transfer to conglomerates.
Though difficult to judge how far the government should regulate or deregulate the business sector, Hyun said some regulations were necessary to maintain market order.
For instance, if the government left the education sector untouched, schools would only be interested in making money by “selling degrees” to students, he noted.
It was because of regulations that the higher education sector “straightened out,” he said.
However, the deputy prime minister cited the need to be flexible when it came to governing industrial zones.
The government would need to ease regulations allowing, for instance, a services-focused company to establish its operations in an industrial zone for manufacturers.
The deputy prime minister added that there was no reason to keep, for example, an industrial zone for agricultural firms if there were no companies interested in operating there.
Hyun projected a rosy outlook for Korea on the back of economic recovery in the U.S. and the Korean government’s fiscal policies, which can help boost the growth rate of Korean exports from nearly flat in the first half to 5 percent in the second half of this year.
By Park Hyong-ki (
hkp@heraldcorp.com)
