Public, firms welcome some pledges but hope others die offAfter Wednesday’s general election, the public is now waiting to see if candidates will follow through with their pledges.
With the Saenuri Party claiming more than half of the seats in the National Assembly, the ruling party is likely to put a cap on increases of monthly rents and key money. According to the party’s proposal, landlords will not be able to increase monthly rents by more than three times the level of inflation. And in areas where rent or key money climbs by close to this limit, special supervision will be conducted.
The threshold for taxes on financial gains is also due to be lowered in line with the party’s welfare pledges. It is currently imposed on financial gains over 40 million won ($35,000).
However, the Ministry of Strategy and Finance has warned about the risk of capital flight.
“They need to be careful when they adjust the threshold because of the potentially negative side effects,” a finance ministry official said.
The party also proposed a higher capital gains tax for major shareholders and for derivatives transactions.
Other pledges may struggle to see the light of day, much to the relief of the local business community. The opposition party’s pledge to ban circular equity investment to reform the country’s conglomerates is a case in point.
It remains unclear whether the party will push forward with the agenda.
“The election results indicate that the public wants the government to create more jobs by focusing on economic stability regardless of whether it comes from left- or right-leaning parties,” said Lee Seung-cheol, an executive at the Federation of Korean Industries. “Policies related to conglomerates should be aimed at achieving that.”
Furthermore, a number of labor leaders were elected, each with their own gripes with management.
“The business community will be watching closely to see how the assembly’s environment and labor committee is composed,” said Hwang In-cheol, a spokesman for the Korea Employers Federation.
By Kim Young-hoon, Limb Jae-un [firstname.lastname@example.org]
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