SMEs and Small Business Owners "Welcome Government's '2024 Second Half Economic Policy Direction'"

Small and medium-sized enterprises (SMEs) and small business owners have welcomed the government's '2024 Second Half Economic Policy Direction.'

The Korea Federation of SMEs stated on the 3rd, "Despite improvements in export performance, SMEs and small business owners are facing worsening business conditions due to high interest rates, high debt, and prolonged domestic demand stagnation," adding, "We evaluate that the swift implementation of the 'Comprehensive Measures for Small Business Owners and Self-Employed' to ease management burdens through financial support and strengthen recovery assistance will greatly help stabilize the livelihood economy."

Deputy Prime Minister and Minister of Economy and Finance Choi Sang-mok is announcing the economic policy direction for the second half of 2024 and the Dynamic Economy Roadmap on the 3rd at the Government Seoul Office in Jongno-gu, Seoul, along with vice ministers from related ministries. Photo by Jo Yong-jun jun21@

The Federation added, "We expect the expansion of income tax deductions for the Yellow Umbrella Mutual Aid and support for employment insurance enrollment for the self-employed to strengthen the social safety net, and the extension of the sunset clause on income tax reductions for SME employees and tax credits for performance bonuses to increase the income of SME workers."

However, the Federation also stated, "For the government's livelihood stabilization policies to be maximized, monetary policy must be pursued in parallel, so we hope the Bank of Korea's Monetary Policy Committee will proactively consider lowering the base interest rate."

The Korea Federation of Small and Medium Business Owners responded positively to the government's policy announcement, saying, "We highly appreciate that this comprehensive plan was prepared through cross-ministerial cooperation among related agencies, including the Ministry of SMEs and Startups."

The Federation emphasized, "Recent sharp rises in loan delinquency rates, increases in business closure rates, and a surge in cancellations of the Yellow Umbrella Mutual Aid indicate that small business owners are being pushed to their limits," adding, "Loans, which were the only option and lifeline to endure the pandemic, have now become a boomerang tightening the noose around small business owners."

They continued, "We hope this comprehensive plan will lead to results that somewhat alleviate the excessive burdens on small business owners facing management crises," and stated, "Small business owners will also do their best to improve management independently to enhance competitiveness and self-sustainability, ensuring that government support measures translate into effective outcomes and contribute to national economic development as the foundation of the livelihood economy."