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| Deputy Prime Minister and Finance Minister Kim Dong-yeon speaks at an economic ministers' meeting at the Government Complex in Gwanghwamun, Seoul, Wednesday. / Yonhap |
By Lee Kyung-min
The government will create 59,000 temporary jobs and lower taxes on refined fuel products by 15 percent for the next six months in a bid to reinvigorate the sluggish economy.
Seventeen trillion won ($13 billion) will be spent within the year to bolster private investment amid the protracted economic downturn and weak jobs data.
These are part of measures the Ministry of Economy and Finance unveiled Wednesday to create more jobs, bolster sluggish private investment and promote innovation-led growth.
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While the measures fall short of addressing structural issues to strengthen the country's economic fundamentals, the government should mobilize all possible measures at this point, Deputy Prime Minister and Finance Minister Kim Dong-yeon said Wednesday.
"The government maintains that the measures reflect the urgent need to prevent a further economic downturn as we expect much hardship going forward," he said at the beginning of an economy-related ministers' meeting at the government complex in Gwanghwamun, Seoul.
"The country's economy is bogged down by weak employment data coupled with reduced private investment, despite brisk overseas sales. The government needs to take pre-emptive measures."
The 59,000 jobs are set to be created by the end of 2018 in sectors that have long suffered from manpower shortages, include anti-disaster, emergency and fire prevention crews.
Around 18,000 administrative positions at various government agencies will be added to help young jobseekers get hands-on experience, a measure that could help them with career preparation.
Another 18,000 jobs will help reinvigorate the economy in areas hit hard by labor force losses due to failing or failed industries including shipbuilding, formerly one of the country's major growth engines.
The government said the job creation will not require any additional tax increase, as unspent money from the budget allocated for this year will be used.
In a bid to reduce the tax burden for the self-employed and low-income families, the government will also lower taxes on refined fuel products by 15 percent, giving taxpayers about 2 trillion won in relief.
Under the measure, the prices of gasoline and diesel will be reduced by up to 123 won and 87 won per liter, respectively from Nov. 6 through May 6, 2019, according to the government.
Of the 17 trillion won allocated for boosting private investment, about 15 trillion won will be offered to small- and medium-sized enterprises (SMEs) in the form of tax incentives and low-interest loans.
Two state-run banks ― the Korea Development Bank (KDB) and the Industrial Bank of Korea (IBK) ― will spend 10 trillion won to shoulder up to 80 percent of such investment for SMEs, traditional industries and budding firms with innovative growth-based business models.
Those with little to no means of obtaining financing will be eligible to take out the full amount in loans.
The remaining 5 trillion won is allocated for facility investments concerning the environment and safety including the reconstruction of old buildings.
The government will spend about 2.3 trillion won by the first half of 2019 to help advance long-stalled private sector-led investment projects.
Large corporations will be eligible for government subsidies, various tax incentives and rent cuts, in a deregulation effort to accelerate the growth of innovative industries.
The government also promised to ease rules to foster a "sharing economy," while relaxing regulations on telemedicine in 2019 to grant better access to advanced medical services for residents in remote areas, a long-neglected group of people.
Experts said the latest measures may help increase the number of jobs in the short term but they are just stopgap measures that fail to address the fundamental issues.
They called for the government to come up with more effective policies to create a business-friendly environment that encourages the private sector to play a bigger role in rehabilitating the economy.
"The measures simply are not sustainable. The quality of the jobs is poor, which means the government has no effective policies to tackle the woeful job market," said Lee Chae-woong, a professor emeritus of economics at Sungkyunkwan University.
