By Yoon Ja-young
Staff Reporter
Last year's tax surplus is likely to be spent on boosting the economy as President Lee Myung-bak starts driving his economic growth plan.
President Lee Sunday said the government would discuss spending tax surpluses on boosting the domestic economy at a press interview ahead of his visit to the United States and Japan. ``The new administration thinks measures should be prepared before the economy worsens,'' he said. ``The most critical point is that domestic demand shouldn't shrink more than the actual economy.''
Emphasizing that revitalizing the domestic economy would be a key policy target, he proposed opening the National Assembly in May to discuss the issue (and others).
Last year, the central government recorded a 15.3 trillion won surplus in tax income. Most of it should be spent on paying back public funds or given to local governments. However, up to 4.8 trillion won could be allocated to a revised supplementary budget upon approval from the National Assembly.
The Ministry of Strategy and Finance had planned to spend the 4.8 trillion won backing up tax cuts, another of President Lee's more important pledges. Following the President remark's, however, the surplus is likely to be spent on boosting the economy.
The new administration under President Lee Myung-bak has been aiming at achieving the annual 6 percent growth target, Lee's main campaign pledge, despite negative external factors. Strategy and Finance Minister Kang Man-soo also asked ministers to take measures to buoy the domestic economy at the economic policy coordination meeting held last week.
The government, which had been refraining from announcing controversial policies prior to the general elections, is likely to start setting up agendas without hesitation now.
The ministry is scheduled to announce its tax cut plan Friday, ranging from corporate and income taxes to inheritance and comprehensive real estate taxes.
The controversial easing of bank ownership restrictions or restrictions on corporate investment by conglomerate subsidiaries is likely to be discussed at the National Assembly due to the Grand National Party (GNP) winning the election.
The President also said the government would focus on creating decent jobs through deregulation and by nurturing the service industry. He had pledged to create 3 million jobs during his five-year presidency, but job market conditions are worsening. The unemployment rate stood at 3.5 percent in February, the highest figure since March last year, and the number of jobless grew by only 210,000 in February from a year ago, the smallest increase since December 2005.