[Hopes for the 22nd National Assembly] Stalled Livelihood and Economic Bills... Must Not Lose Momentum Due to Political Strife

Concerns Over Repeated Political Conflicts in Female-Minority National Assembly
Challenges Expected in Advancing Three Major Reforms

As the 21st National Assembly concluded, a large number of key livelihood and economic bills promoted by the Yoon Seok-yeol administration were stalled. With the 22nd National Assembly, which began on the 30th, expected to repeat extreme political conflicts in a situation where the ruling party holds fewer seats than the opposition, difficulties are anticipated in passing bills aimed at overcoming the economic crisis and stabilizing livelihoods. There are calls for the government and ruling party to prioritize livelihood bills first and for the opposition to cooperate with a more progressive attitude.

According to the National Assembly’s legislative information system, a total of 16,378 bills pending were automatically discarded with the closure of the 21st National Assembly. Among these were a significant number of key bills related to livelihood and economic issues. As the political conflict over the 'Chae Sang-byeong special prosecutor' issue escalated to the extreme until the end, even livelihood bills with relatively small differences in opinion failed to pass the 21st National Assembly and were discarded.

A representative livelihood bill is the amendment to the 'Restriction of Special Taxation Act,' which provides a 70% reduction in individual consumption tax when replacing vehicles older than 10 years and increases the income deduction rate by 10 percentage points for increased credit card usage in the first half of this year. Due to prolonged deadlock, this bill was eventually carried over to the 22nd National Assembly. Expansion of tax benefits for Individual Savings Accounts (ISA) and special tax treatment for unsold houses completed outside the metropolitan area also need to be reintroduced and passed in the 22nd National Assembly. Most of these are measures announced by the government earlier this year through its economic policy direction.

Measures related to low birth rates, which have attracted the attention of young dual-income couples, also failed to be processed. A representative example is the 'Maternity Protection Three Acts' (amendments to the Act on Gender Equality in Employment, Employment Insurance Act, and Labor Standards Act), which guarantees parental childcare leave for up to three years. The Maternity Protection Three Acts include provisions to extend parental childcare leave from one year per child (up to two years) to one year and six months per child (up to three years), and to expand the age of children eligible for reduced working hours during childcare from the current 8 years to 12 years. Although there was a consensus between the ruling and opposition parties on the urgency of overcoming the low birth rate issue and smooth agreement was expected, the passage was blocked when members of the People Power Party on the Environment and Labor Committee boycotted the meeting on the 7th amid the Chae Sang-byeong special prosecutor political situation.

Major economic bills are also at a standstill. The amendment to the Income Tax Act and Restriction of Special Taxation Act, which included the abolition of the financial investment income tax, was ultimately stalled amid the 'tax cut for the rich' frame. The 'K-Chips Act,' which raises the tax credit rate for semiconductor investments, and the 'Distribution Industry Development Act,' which relaxes mandatory weekend closures for large supermarkets, were all discarded without even being discussed. The K-Chips Act is a tax incentive aimed at encouraging domestic facility investments in advanced strategic industries such as semiconductors, secondary batteries, electric vehicles, and displays. It proposes raising the tax credit rate from 8% to 15% for large and medium-sized enterprises and from 16% to 25% for small and medium-sized enterprises, extending the deadline by six years until the end of 2030. To extend the law before its sunset clause expires, it must pass the plenary session of the 22nd National Assembly within this year. Considering the time required from bill submission to plenary approval, the situation is urgent.

Chu Kyung-ho, floor leader of the People Power Party, is speaking at a press conference held at the National Assembly on the 29th. Photo by Kim Hyun-min kimhyun81@

Not only new legislation but also the so-called three major reforms in labor, pensions, and education are expected to face rough roads. With the rapid depletion of funds due to low birth rates and aging populations, concerns about fund insolvency are growing, and the 'National Pension Reform' failed to pass in the 21st National Assembly. The ruling and opposition parties agreed on raising the current 9% contribution rate to prevent fund depletion and reduce the burden on future generations and narrowed differences on the income replacement rate, but ultimately failed. The ruling party argues that adjusting the contribution rate alone is insufficient to prevent pension fund insolvency and that structural reforms to redesign the system must accompany it, making consensus difficult in the 22nd National Assembly as well.

Experts point out that the government and ruling party should promptly reintroduce and process the livelihood and economic bills that were discarded due to political conflicts. It is expected that negotiations over the organization of the National Assembly will be prolonged, and with the nationwide local elections (2026), presidential election (2027), and National Assembly election (2028) scheduled one year apart, the ruling and opposition parties may lack the motivation to push for bill passage. Professor Cho Won-bin of the Department of Political Science and Diplomacy at Sungkyunkwan University said, "Even in a National Assembly where the ruling party holds fewer seats, it is the ruling party that leads the political situation. To prevent the prolonged drifting of livelihood bills and ensure prompt processing, leadership from the presidential office and the ruling party is needed."