Ruling party pushes better pay for conscriptsThe ruling Democratic Party Friday asked the government to dramatically increase wages paid to conscript soldiers as President Moon Jae-in promised during the campaign.
The party also discussed with the government other policy areas to boost welfare, such as increasing benefits for couples with kids and basic pensions for the elderly and dementia patients.
A consultation meeting at the National Assembly was attended by Kim Tae-nyeon, the DP’s chief policymaker, and other party members and deputy prime minister for economic affairs Kim Dong-yeon, who doubles as finance minister, on behalf of the government.
“Reflecting on the current state of national security, we demanded an increase in the defense budget next year as well as a dramatic hike in wages for conscript soldiers,” said Rep. Kim following the meeting. The party wants soldiers to be paid half of the minimum wage by 2022. The current minimum wage is 1.35 million won ($1,182) a month.
Improving life for young Korean men doing their two-year mandatory military service was one of Moon’s campaign promises. He vowed to raise the monthly wage to the 700,000 won level by 2020 through gradual increases.
Rep. Kim also said that as “economic recovery is not robust,” the party called on the government to exercise an expansionary fiscal policy.
“To actively respond to the fiscal needs, I stressed the importance of having an expansionary budget plan as well as a strong restructuring of state expenditure,” said the lawmaker.
The meeting came as the National Assembly is getting ready to examine the government’s budget plan for 2018, which is subject to its scrutiny before final passage at year’s end.
The DP’s demands Friday were in line with the Moon Jae-in government’s drive for wider welfare benefits, including a raise in minimum social security benefits.
The government’s plan is expected to cost 178 trillion won to accomplish and has raised concerns over the soundness of state finances and whether the country has enough money to finance such benefits.
Finance Minister Kim said Friday that the government would secure some 11 trillion won in savings by restricting its expenditures.
The government is pushing a tax hike for the “super rich,” or people making 300 million won or more a year.
For people making 500 million won a year, the government wants to raise the income tax rate to 42 percent from the current 40 percent. For people making between 300 and 500 million won, it wants a two percent hike to 40 percent from the current 38 percent.
The government estimates around 90,000 people will be affected by the changes if the tax revision is passed by the Assembly, collecting an estimated additional 1 trillion won in revenue.
For companies with profits above 200 billion won a year, the government wants to boost the corporate tax rate to 25 percent from the current 22 percent. 129 companies will be subject to the change if implemented, which will be the first time the corporate tax rate is increased in 28 years.
Critics say such measures fall far short of making up for increases in expenditure on welfare. The national debt-to-GDP ratio, or the ratio of government debt to gross domestic product, was 39.3 percent last year, which the government expects to increase by 1.1 percentage point to 40.4 percent this year.
The government estimated earlier that if current welfare programs continue without expansion, the debt-to-GDP ratio would be 62.4 percent in 2060 due to the rapidly aging society and widening spending on welfare that accompanies it.
Rep. Na Kyung-won of the largest opposition party, the Liberty Korea Party, lashed out at the government’s welfare policy drive Friday. She said Moon was running a “YOLO [You Only Live Once] government,” that doesn’t know how it will pay for its promises.
“The government is championing benefits that sound really appealing. But where is the money [to finance them]?” asked Na, “We have deep concerns about whether our economy can be sustained with such wide welfare benefits.”
BY KANG JIN-KYU [email@example.com]