By Kim Tae-jong
Minister of Strategy and Finance Bahk Jae-wan expressed his opposition to increasing electricity charges Friday, saying public firms should first reform themselves before trying to raise public utility fees.
“Although there is talk about the need to raise public utility charges, people have also said that public firms should first tackle their moral hazards,” Bahk said during a price stabilization meeting at the government complex building in Seoul.
The remark was in line with the government’s recent rejection of the proposal of the Korea Electric Power Corporation (KEPCO) to raise bills for both households and corporations by about 16 percent.
Bahk’s reaffirmation of this was also a counterattack against KEPCO as it came just a few days after its board of directors publically criticized the government’s rejection.
The board had previously proposed raising electricity bills by 10.7 percent on average, with a government subsidy equivalent to an extra 6.1 percent, citing huge deficits over the past few years.
But the Ministry of Knowledge Economy (MKE) turned it down, arguing it was against efforts to tame inflation, support low-income households and help boost the competitiveness of the manufacturing industry. KEPCO is a state-run company under the ministry.
It is known that the government plans to increase the rates by less than 5 percent, but KEPCO has argued this is not even nearly enough.
Bahk also noted at the meeting that there should be efforts for public firms to reform their business structure first, although there are some factors that require price increases such as hikes in raw material costs and outstanding deficits.
Regarding education costs, he said textbooks used for television lectures shown by local broadcaster Educational Broadcasting System prevent increased spending in this area because they are priced 50 to 60 percent lower than other textbooks. At the meeting, they decided to decrease the prices of 31 EBS textbooks published in the latter half of the year by 2.1 percent.
He also praised the television lectures, saying they helped decrease private education costs by 900 billion won last year, meaning a high school student paid 300,000 won less for private education.
He asked the Ministry of Education and Human Resources Development to tame prices in education such as private lessons, textbooks and school uniforms.
He also said that the government is now trying to make a special deal with farmers in order to supply agricultural products at stable prices.