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GNP in identity crisis amid reform calls

Ruling party shelves additional tax cut plan, scrambles to cut tuition


The ruling Grand National Party has gone to great lengths to renew its image, even defying the policies of the current administration, but many still regard its moves with a doubtful eye.

In a general meeting held Thursday, a majority of GNP lawmakers agreed to withdraw the additional tax cut plan for corporations, which has so far been the core of President Lee Myung-bak’s economic blueprint.

Lee’s policies are largely based on the trickle-down economics, claiming that overall growth must first be based on the growth of the conglomerates and the high-income brackets, which will then be extended to the smaller companies and lower-income groups.

Even amid an unstable economic situation and employment crisis, which pushed the government to change its stance from “corporation-friendly” to “people-friendly,” the government adhered to its tax plan.

“The corporate tax cut will greatly boost employment,” said Finance Minister Bahk Jae-wan on Thursday.

This policy was, however, met with resistance from the ruling party, which chose to pacify the skeptical public rather than to stick to Cheong Wa Dae’s guidelines.

“The withdrawal of the tax cut plan is crucial in proving our party’s intent to renovate and a majority of the members have agreed to it,” said Rep. Jeong Tae-keun, who was supported by other reform-minded lawmakers.

Ever since its crushing defeat in the April by-elections, the ruling party has pledged to scrap its negative image and to win back the public trust before next year’s big races. Amid such attempts, relatively progressive lawmakers have taken over leading roles within the party and added momentum to reformative, “people-friendly” plans.

However, Rep. Na Seong-lin and others blamed the party for lacking political consistency and turning its back on the financial circles and traditional GNP supporters.

“Despite disputes, our lawmakers have acknowledged the fact that though economic indexes have improved, the results have never reached down to the people,” said the party’s policy committee chairman Lee Ju-young.

Calling off the tax cut plan was a major campaign pledge by Reps. Hwang Woo-yea and Lee Ju-young before they were elected as floor leader and policy chairman last month.

The presidential office, though it refrained from making an official statement on the issue, said it will negotiate with the ruling party until the parliament’s next regular session, according to officials.

“We will fully welcome the additional tax cut withdrawal, should the GNP confirm this direction,” said the spokesperson of the main opposition Democratic Party.

“The GNP, however, should immediately act up to the plan instead of waiting until the September session in order to prove its sincerity.”

The minority Liberty Forward Party claimed that the administration should also call off other proposed tax cuts favoring the wealthy.

The tax cut withdrawal was not the only about-face the ruling party has made over the past month.

The ongoing university tuition fee dispute within the National Assembly was triggered by floor leader Hwang Woo-yea’s pledge last month to drastically cut the ever-increasing tuition fees.

This unprecedented decision was met with resistance both from the opposition camp and from schools.

The main opposition Democratic Party criticized the GNP plan as a shallow move to win over votes, whereas schools showed concerns that a tuition cut without sufficient governmental support may only weaken their financial status.

Voices also rose within the party that lawmakers should refrain from rushing with progressive plans.

“Despite the calls for renovation, the ruling party should first thoroughly review the contents and communicate with the government before submitting a policy,” said Rep. Chung Ui-hwa, chairman of the emergency policy committee.

By Bae Hyun-jung (tellme@heraldcorp.com)
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