The South Korean government under President Moon Jae-in will spell out economic policy direction for this year on Tuesday designed to change the country’s economic paradigm, said deputy prime minister for economy Kim Dong-yeon Thursday.

The economic policy outline that usually comes out at the beginning of the year has been newly drawn up by the transition team of liberal President Moon Jae-in who came into office after winning the May 9 snap election following the removal of impeached president before her term ended in February next year.

The new outline will be a “fundamental address” to the structural problems of slow-moving economy and worsening discrepancies in income and wealth, said Kim who doubles as the finance and strategy minister.

He said the new policy direction aims to balance growth and distribution by aiding the demand end through increased hiring and income and the supply end through industrial focus on innovation.

He admitted that means of financing the ambitious 100-point national agenda the government has set for the next five years under Moon’s presidency are somewhat “unclear.”

The government on Wednesday said its economic plank of the five-year state agenda devoted to increase hiring and income as well as bolstering social welfare would require 178 trillion won ($158 million) over the next five years.

He said the government would have to be “honest” with the people that increased tax revenue is necessary to improve social welfare and start publicly discussing hike in tax rates.

He hinted that the tax rates on the top-income corporate bracket last cut in 2008 should be restored as lower corporate tax rates have not helped much to stimulate corporate investment and hiring.

But since raising individual and corporate income taxes is a hugely sensitive issue, it needs to be discussed thoroughly within the government and with taxpayers, he said.

By Cho Si-young

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]