[EDITORIALS]Finance minister lacks powerThe government has finally decided to proceed as planned to impose a heavy capital gains tax on owners with three or more housing units from Jan. 1. The policy was finalized just 15 days before its start date because the government’s economic team and the Blue House were arguing over whether to delay the plan.
The month-long dispute over the start date showed what is wrong with the Roh Moo-hyun administration’s economic policy-making process. The ensuing confusion about the real estate tax is problematic, but the government’s economic team’s lack of leadership is the more serious issue.
The bulk of the blame rests on Finance Minister Lee Hun-jai, of course. He caused a great deal of confusion because he didn’t gain a consensus among other ministries before he announced that the government would delay imposing the tax.
But the system, which doesn’t give Mr. Lee the final authority, also has flaws. The chief of the presidential commission for policy planning, who does not have a say the timing of the capital gains tax, publicly opposed the delay. Also, after the prime minister and chief policy maker of the governing Uri Party failed to coordinate differing views, the president seemed to have mediated between the two sides.
The situation didn’t allow Mr. Lee to play his role as the economic deputy prime minister. Such conflict is enough to cause people to lose trust in the current administration, as well as in the administration’s economic team.
With this issue, the leadership of Mr. Lee has been damaged again. His talk of delaying the tax led to an even worse outcome than if he had kept silent on it. If an economic policy announced by the economic deputy prime minister is so easily overthrown by the Blue House, how can he carry out his economic policies with authority and responsibility?
In addition, who would trust the government’s words? Such a collapse of the economic leadership would further deepen the economic crisis.
Distrust and uncertainty prevails in the market now because of inconsistent government policies and economic principles that change according to the ideological trend. If the government expects the economy to move forward, the economic team should be able to carry out policies consistently in accordance with economic principles. Mr. Lee himself should seriously think about this problem.