Support Steps Eyed for Salaried Workers
By Lee Hyo-sik
Staff Reporter
The country's top economic policymaker said Wednesday the government will soon introduce a range of measures to help salaried workers and the self-employed struggling to cope with soaring oil prices.
In an economy-related ministers' meeting, Strategy and Finance Minister Kang Man-soo said the administration will also cut corporate income and other taxes to help encourage businesses to invest more, create jobs and strengthen the country's growth potential.
``High consumer prices, a ballooning current account deficit and falling gross national income (GNI) are hitting low-income families and the self-employed hard. Surging international oil prices are the main culprit behind the deteriorating economic conditions and the government cannot control these. But we should make an effort to mitigate the fallout on the economy,'' Kang stressed.
The government has unveiled a number of inflation-control measures over the past few months but failed to contain surging inflation. It has even been blamed for spiking the already high prices of imported commodities here by keeping the won low against the greenback, forcing businesses and households to pay more for goods and services.
Consumer prices rose 4.9 percent in May from a year earlier, the highest since June 2001 when prices jumped 5 percent, according to the National Statistical Office (NSO). Consumers felt the inflation burden more heavily since the cost of living index, consisting of food and other daily necessities, soared 5.9 percent.
The country's current account shortfall stood at $1.56 billion in April, up from $110 million a month earlier, while GNI contracted 1.2 percent in the first quarter from the previous three-month period, the largest quarterly setback since it posted a drop of 1.6 percent in the first quarter of 2003.
Kang said the government will introduce both short-term and long-term steps to ease the financial distress facing the low-income bracket and small businesses.
``We will be selective as to whom we will provide with support. Salaried workers and the self-employed who actually suffer from surging oil and other raw material costs will get state assistance. We will also carry out a range of tax cuts in a speedier manner to promote corporate investment, stimulate private consumption and strengthen growth potential,'' he stressed.
On Tuesday, the government said it will cut the maximum corporate tax rate from 25 percent to 20 percent by 2011, two years ahead of its initial timetable, to encourage businesses to expand investment and to attract more foreign direct investment. The minimum tax rate will be lowered to 10 percent from the current 13 percent over the next three years.
To boost domestic demand, excise taxes on green fees at golf courses in provincial areas will be scrapped before 2011 to encourage golfers to spend money here rather than overseas.