Kim Dong-yeon, Nationwide 250,000 Won 'General Agreement, Specific Opposition'..."Support for Vulnerable Groups Should Be Strengthened"

"Geumtu Tax is Backward, Should be Introduced Alongside Improvement of Underdeveloped Capital Market"
"Difficult to Agree with Yoon Seok-yeol Government's Fiscal Policy... Neglect of Duty and Policy Vacuum"
"Financial Supervisory Service Chief's Interest Rate Remarks... Stem from Lack of Understanding of the Economy"

Kim Dong-yeon, Governor of Gyeonggi Province

Gyeonggi Province Governor Kim Dong-yeon stated regarding the implementation of the 'Financial Investment Income Tax' next year, which could bring about a major shift in the capital market, that he "does not agree with any of the three options: enforcement, abolition, or postponement," and insisted that "while improving the backward and underdeveloped capital market, the financial investment income tax should be introduced simultaneously."

Regarding the '250,000 KRW payment to all citizens' proposed by Lee Jae-myung, leader of the Democratic Party of Korea, he said, "In principle, I agree with the need for fiscal expansion policies," but presented a different opinion, stating, "However, since fiscal policy can be targeted, there is a need to strengthen support for vulnerable groups."

Furthermore, about the current fiscal policy of the Yoon Seok-youl administration, he diagnosed, "There are too many parts that are difficult to agree with," and described it as "a neglect of duty and a policy vacuum."

Governor Kim recently appeared on a certain YouTube channel and spoke about the financial investment income tax, which has become a recent issue, saying, "I do not agree with any of the three options: enforcement, abolition, or postponement. Enforcement now is not the answer," and directly criticized, "Talking about tax cuts for the wealthy while doing this shows a lack of understanding of our capital market."

He continued, "Abolishing the financial investment income tax is also not the answer. Ultimately, if there is income, there should be taxation, and the financial investment income tax should be implemented eventually," and analyzed, "The idea of postponement is merely a stopgap measure that defers a troublesome problem."

He added, "Our capital market and stock market are very underdeveloped compared to the size of the economy and market capitalization," and said, "First, it is necessary to correct various systems and practices where controlling shareholders infringe on or fail to protect the interests of common shareholders. Along with improving practices and systems to raise the shareholder return rate, which is almost at the bottom among OECD countries, and implementing dividends or treasury stock cancellations, I believe the financial investment income tax should be implemented together."

Regarding the 250,000 KRW support payment to all citizens, Governor Kim stated, "I agree with providing such support or assistance in the current situation."

However, he said, "I do not agree with distributing it to all citizens indiscriminately," and suggested an alternative, "I hope it would be given more thickly and thoroughly to the more vulnerable groups. Unlike interest rate, monetary, or exchange rate policies, fiscal policy can be targeted, so it is possible to differentiate the amount given to the intended groups."

He emphasized, "If 250,000 KRW is distributed to all citizens, it is said to cost 13 trillion KRW. This money does not fall from the sky. It is the result of giving up all other projects that could be done with 13 trillion KRW," and added, "(According to past statistics) since vulnerable people have a high propensity to consume, it is necessary to provide them with substantial support."

He actually stated, "When the nationwide disaster relief fund was given last time (in 2020), it was not highly connected to consumption," and argued, "When money went to people with a certain income or higher, they did not spend it on consumption but used it elsewhere or saved it. However, if it is given thickly to the middle class or below, or to small business owners and self-employed people, it is good for economic revitalization and also serves as a targeted fiscal role."

Governor Kim sharply criticized the Yoon Seok-youl administration's fiscal policy.

He said, "The situation is very difficult now," and criticized, "At least from my perspective, the government’s current approach to fiscal policy is neglect of duty and a policy vacuum."

He continued, "South Korea’s fiscal situation overlaps two issues. The first is difficulty and crisis, and the second is where South Korea should take its future growth engines within the current international economic order," and lamented, "For example, responding to climate change is a public good, so it is not easy for companies to handle, but the government should boldly invest in such areas. While the whole world is doing so, we are currently doing nothing."

Regarding Financial Supervisory Service Chairman Lee Bok-hyun’s recent remarks on interest rates, Governor Kim said, "It was a very inappropriate comment," and questioned, "Why is the Financial Supervisory Service chairman talking about commercial bank interest rates instead of focusing on financial supervision?"

He particularly pointed out, "If the comment about lowering interest rates was necessary, it could have been made unofficially," and criticized, "In my view, first, it shows a lack of understanding of the economy, and second, it shows incompetence."