Korea to increase flexibility in parental leave system

South Korea’s Deputy Prime Minister and Finance Minister Hong Nam-ki said Thursday that the government will work to diversify the current parental leave system, allowing parents to split their leave period according to needs.

“In order to respond to the decreasing number of productive age population, it is crucial that we should encourage everyone to participate in economic activities,” Hong said in a meeting of economy-related ministers held at Seoul Government Complex.

The minister suggested ways to allow parents to split up their parental leaves, activate the housekeeping service market by establishing a domestic servant labor law, and liaise discouraged young job seekers to valid jobs.

The fiscal chief’s remark came in the wake of the latest figures by Statistics Korea, which showed that Korea saw its fertility rate stand at 0.92 last year, down 6 percent on-year. Asia’s fourth-largest economy was the only one among the 37 member states of the Organization for Economic Cooperation and Development to have its fertility rate in the zero percentage range.

The government also vowed to take a pre-emptive response to regional extinction, referring to the demographic imbalance which is leading to the desertion of provincial regions.

“We will set up an information network on empty houses and their transaction records and offer benefits such as a 10 percent redemption of transfer income tax when a residential owner sells the property to a public service operator,” Hong said.

The government is slated to finalize and announce its mid-term road map on low birth and aging society within the year.

Meanwhile, the government also announced that it will extend the loan repayment grace period for individuals and businesses that reel under the prolonged fallout of COVID-19.

“The financial circles have decided to extend the maturity and postpone the interest payment of loans that are due in September,” Hong said.

The daily number of newly confirmed coronavirus patients reached 441 as of the previous day, hitting the record-high in 173 days, while the corresponding number in Seoul also renewed its own record with 154.

Earlier this week, the chief fiscal policymaker said the government will review the need to provide an additional set of emergency handouts, should the latest epidemic spread continue.

Currently, the number of applications for debt maturity extensions reached 246,000, totaling to 75.8 trillion won ($63.91 billion), while the number of interest payment deferment came to 9,382, totaling to 107.5 billion won, officials said.

Though the growing volume has been weighing down on the nation’s fiscal capacities, the chief policymaker reiterated that the government will “actively push for additional measures to cope with damages” for vulnerable people.

The government has so far executed some 50 trillion won or 70 percent out of the 68 trillion won which it pledged as emergency funds for struggling owner-operators and small-sized businesses, according to the Ministry of Economy and Finance.

Addressing the virus-hit aviation industry, the government offered to extend the exemption of key fees until the end of the year.

“We shall extend the exemption of landing fees and airport charges for airline operators from end-August to end-December,” Hong said.

Ground service operators -- such as banks and duty-free shops -- will also have their airport rent fees reduced for another four months, in relation to the reduced number of airport users.

These actions are expected to be equivalent to a financially alleviating effect worth 29 billion won for air carriers and 420 billion won for airport commercial facilities, according to the ministry.

“In a mid- and long-term approach, (the government) will encourage air carriers to establish an aviation cooperative so that companies may work together in group purchasing fuel or raising aviation funds,” Hong said.

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