Chairing the 'Second Half Economic Policy Direction' Meeting
Interest Burden Reduced for Small Business Owners Hit Hard by High Interest Rates
President Yoon Suk-yeol stated on the 3rd, "The government has prepared a comprehensive support plan for small business owners worth 25 trillion won," adding, "We will expand the target for low-interest refinancing loans from low-credit borrowers to medium-low credit borrowers to reduce the interest burden on small business owners." He also emphasized, "Rather than populist cash handouts, we will provide sufficient tailored support to small business owners in urgent need and promote structural measures." The intention is to ease the interest burden on small business owners who have been directly hit by prolonged high interest rates and give them some breathing room.
On the same day, President Yoon presided over a meeting at the Blue House State Guest House to announce the 'Second Half Economic Policy Direction and Dynamic Economy Roadmap,' stating, "We will reduce the essential cost burdens on small business owners." This is the fifth time since his inauguration that President Yoon has chaired a meeting discussing economic policy directions.
President Yoon Suk-yeol is speaking at the 'Second Half Economic Policy Direction and Dynamic Economy Roadmap Announcement' event held on the 3rd at the Blue House State Guesthouse in Jongno-gu, Seoul. [Image source=Yonhap News]
In his opening remarks, President Yoon pointed out, "Small business owners, who were the hardest hit during the pandemic, are still in a difficult situation," and noted, "Loan support for small business owners who borrowed during the COVID-19 period has increased sharply, and as a result of excessive business restrictions, their delinquency rates have risen significantly." Diagnosing that the interest burden has greatly increased amid the ongoing high-interest trend, along with rising labor and rental costs, President Yoon proposed expanding the target for low-interest refinancing loans from low-credit borrowers to medium-low credit borrowers to reduce the interest burden on small business owners.
President Yoon said, "We will extend the repayment period for policy funds and guaranteed loans up to five years for up to 800,000 small business owners and also ease the burden of electricity and rent," emphasizing, "We will double the sales criteria for electricity fee support from the current 30 million won per year to 60 million won, expanding support to up to 500,000 small business owners."
He also proposed measures to reduce the rental burden on small business owners. President Yoon stated, "For small business owners facing closure, we will support debt restructuring along with their recovery," and added, "We will expand the New Start Fund, which was previously only available to small business owners affected by COVID-19, to all small business owners who operated their businesses until the end of June this year, increasing the fund size by 10 trillion won to support approximately 300,000 additional people."
"Tailored Support, Not Populist Cash Handouts"
President Yoon Suk-yeol is presiding over the 'Second Half Economic Policy Direction and Dynamic Economy Roadmap Announcement' meeting held on the 3rd at the Blue House State Guest House in Jongno-gu, Seoul. [Image source=Yonhap News]
On the same day, President Yoon reiterated his negative stance on simple cash support policies such as the opposition party's proposal to provide 250,000 won per person to all citizens. He emphasized, "Rather than populist cash handouts, we will provide sufficient tailored support to small business owners in urgent need and promote structural measures." This was interpreted as a critique of the recent submission of the Livelihood Recovery Support Fund bill by the Democratic Party to the National Assembly's Administrative and Security Committee. The bill, led by former Democratic Party leader Lee Jae-myung, includes provisions to provide regional gift certificates worth 250,000 to 350,000 won per person based on income levels to all citizens.
President Yoon also harshly criticized indiscriminate cash support and populism at the Cabinet meeting held on April 16, shortly after the April 10 general election, stating, "Indiscriminate cash support and populism ruin the country's future." The Presidential Office explained, "President Yoon emphasized that while sufficiently supporting small business owners who urgently need help to overcome the crisis and recover, structural and permanent measures, rather than temporary cash handouts, must be pursued together," adding, "Sustainable growth of the national economy is essential for fundamental improvement of livelihoods."
"50,000 Urban Rental Housing Units... Pursuing Low-Rate Separate Taxation on Dividend Income"
Efforts will also be made to establish and expand value-up programs that enhance corporate value and provide more asset-building opportunities to the public. President Yoon said, "We will provide tax benefits to companies that actively increase dividends and pursue low-rate separate taxation on shareholders' dividend income," emphasizing, "We will also solve structural problems to stabilize the difficult livelihood situation." Furthermore, he stated, "We will significantly increase housing supply so that citizens can find homes where and when they want," adding, "We will supply more than 50,000 rental housing units for citizens and youth by utilizing old government buildings in urban areas and increase long-term rentals for the middle class by more than 100,000 units."
Structural improvements in food prices will also be pursued. President Yoon said, "We will use advanced science and technology to increase productivity in agriculture, livestock, and fisheries, and by 2027, we will expand online wholesale market transactions to 5 trillion won, the current scale of Garak Market transactions, to promote competition among distribution channels and strengthen protection for producers and consumers," adding, "We will also continue efforts to secure overseas supply sources through tariff quotas."
On the day, President Yoon also expressed frustration that South Korea's favorable macroeconomic indicators and international evaluations have not directly translated into vitality in people's livelihoods. He said, "While reducing the time lag for the warmth of economic recovery to reach the livelihood sites, we must also solve structural problems of livelihoods," and asked, "I hope that today's discussion will serve as a starting point for structural improvement of livelihoods, and I expect related ministries and private participants to offer many good suggestions."
Following this, Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok presented the main contents of the 'Second Half Economic Policy Direction,' 'Dynamic Economy Roadmap,' and 'Comprehensive Measures for Small Business Owners and Self-Employed.' The meeting was attended by small business owners from the field, such as hairdressers and Western restaurant operators, as well as economic experts including consulting company CEOs and vice-chairmen of the National Economic Advisory Council, who conveyed voices from the field.
From the government side, Prime Minister Han Duck-soo, Deputy Prime Minister Choi, and other cabinet members, Director of the Office for Government Policy Coordination Bang Ki-seon, Chairman of the Fair Trade Commission Han Ki-jung, Chairman of the Financial Services Commission Kim Ju-hyun, Vice Chairman of the Committee on Population Aging and Low Birthrate Joo Hyung-hwan, and Chairman of the Local Era Committee Woo Dong-gi attended. From the People Power Party, Emergency Committee Chairman Hwang Woo-yeo and Policy Committee Chairman Jeong Jeom-sik participated. From the Presidential Office, Policy Chief Seong Tae-yoon, Senior Secretary for Civil Affairs Kim Ju-hyun, Senior Secretary for Economic Affairs Park Chun-seop, Senior Secretary for Social Affairs Jang Sang-yoon, and Senior Secretary for Science and Technology Park Sang-wook were present.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
