Rental Housing Cooperatives To Be Introduced

The government decided to introduce the rental housing cooperative system starting next year and to raise the ratio of floor space over land space within the redevelopment area, 20 percent from the current ratio, in order to solve the rental housing shortage and to promote the construction of the rental housing. And it will introduce the senior medical insurance system for aged persons who need long-term treatment due to the diseases such as dementia, and will newly set up the supporting system for the children who are physically challenged.

The government set up such plans in a meeting `to set up the measures to nurture the middle class and to improve the peoples` living condition`. The meeting was presided over by President Kim Dae-Jung, and Jin Nyum Deputy Prime Minister and Minister of Finance and Economy, 11 cabinet ministers, the chairpersons of three parties` policy committees, the presidents of the economic organizations, and the economic research institutes.

In the meeting, the government decided to utilize the de-listed greenbelt zones as the construction sites for the public rental housing, and to raise the ratio of floor space over land space within the redevelopment area from the current 180-250 percent to 200-270 percent, up 20 percent.

The government pledged to introduce the local land taxation system in which the transaction tax such as an acquisition tax and a registration tax will be cut down, and the unitary land holding tax will be imposed on all lands in order to increase tax burden on land holding. And it will execute the dual general land tax system in which the progressive tax will be imposed on landowners who possess the land over a certain size.

In addition, the government will actively review to introduce the senior medical insurance system to provide the care and the family nursing service to the elderly who need long-term treatment for dementia and cerebral apoplexy, and will pursue the plan to establish at least one special dementia hospital in each province and city.

Further, the government will revise the current retirement allowance system, and thus will introduce the corporate pension system designed to guarantee the severance pay for the retiring workers. And it plans to exempt the stamp tax for consumption charter and commercial store charter whose down-payments are below a certain amount, in order to help minor retail merchants.

The government announced to create the additional venture investment fund of 600 billion won during the second half of this year, to invest for the new industries such as information technology (IT) and biotech (BT), and to activate the on-spot experience program for the college students in the small and medium venture companies. And the special job training programs will be offered to the 5,000 middle-aged jobless people.

President Kim Dae-Jung told in this meeting that ``to pursue the productive welfare policy is to promote the lower income class to the middle class and thus to strengthen the middle class. When the working class people are equipped for the economic mobility, the nation can develop``.

And President Kim ordered Deputy Prime Minister Jin to have the meeting to review the practice of the measures every quarter, saying that ``the welfare system reached the level of the advanced countries, but the system`s benefits should be bestowed well to the vulnerable classes``.

Meanwhile, some pointed out that the major measures presented in this meeting are mostly the repetition of the plans which have been pursued by each minister and department.

The report said that Deputy Prime Minister Jin endeavored to establish new measures until the deep night of 18th, but he could not find the plausible solution.

Park Byung-Won, the head of the economic policy bureau in the Ministry of Finance and Economy, explained that this meeting concentrated on enumerating the plans to actively pursue in the second half of this year rather than including the new measures.

yhchoi65@donga.com