NPAD leader calls for new revival plan for economy

Moon Jae-in

The chairman of the main opposition on Thursday proposed the introduction of what he called a “new economy,” in which economic growth, led by an increase in income and fair business play between major and small to medium-size companies, is required.

He was also aggressive in criticizing the economic policies of the Park Geun-hye administration for falling far short of fixing nationwide economic grievances.

In a parliamentary address before fellow lawmakers, Moon Jae-in, the chairman of the New Politics Alliance for Democracy (NPAD), emphasized the importance of reviving the long-stagnant economy by increasing incomes for ordinary citizens and leveling the playing field for conglomerates and their subcontractors.

Major Korean corporations have enjoyed special favors for far too long, he pointed out, adding that the time has come to fix such practices.

Moon began his address by referencing remarks made by late President Kim Dae-jung during his 1971 campaign, in which Kim noted that national conglomerates had received special tax favors from the Park Chung Hee government and had 120 billion won ($109.9 million) in taxes waived.

This situation, the NPAD chairman continued, has remained unchanged for 44 years.

“After half a century, we are reflecting on whether that privileged economy has become history. But don’t we have such a privileged economy to this day only in another form?” Moon asked. “It has been seven years since the former Lee Myung-bak government slashed taxes on the rich, which only benefitted chaebol groups while emptying the pockets of the people.”

Major corporations now have 540 trillion won in their possession but fail to distribute that wealth to the middle class, Moon continued in his criticism. Stressing the need to raise wages, he said it has become apparent that existing economic policies have no chance at reviving the economy.

“Only after people have more money in their pockets will it lead to a boost in spending and reviving the domestic economy, which in turn will also benefit business groups.”

Repeating his oft-touted demand to return the corporate tax rate to 25 percent from the current 22 percent, the chairman said the government could earn 4.6 trillion won in extra revenue by normalizing corporate taxes.

The corporate tax rate was cut 3 percent in 2008, during the former Lee Myung-bak government and has remained at that level since.

“Let’s have a bipartisan discussion to reform the corporate tax policy,” he said, “as the [ruling] Saenuri Party has also said raising the corporate tax should not be ruled out.”

On long-stalled inter-Korean relations, Moon called on the Park government to lift the sanctions imposed in retaliation for North Korea’s sinking of the Cheonan warship in 2010, which grounded all inter-Korean economic cooperation to a halt with the exception of the Kaesong Industrial Complex.

“If a complete lift is not possible, the government should at least soften restrictions to find an opening in the gridlock,” he said.

BY KANG JIN-KYU [kang.jinkyu@joongang.co.kr]