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Gov’t to Freeze Public Utility Charges

Posted March. 04, 2008 03:00,   


President Lee Myung-bak yesterday ordered the Cabinet to devise special measures to stabilize the economy. He said “An increase in prices of industrial goods resulting from rising raw material prices is inevitable. However, public utility charges and consumer prices can be kept in check if the government has firm determination.”

Against this backdrop, the government decided to temporarily cut the current elastic tax rate on oil products by 10 percent this month and apply the reduced tax rate by the end of this year. It also announced that it would exempt taxi drivers from oil tax on liquefied petroleum gas (170 won per liter) from May, effective for two years.

In order to encourage conglomerates’ corporate investment, which, in turn, will lead to job creation, the government is set to abolish the current limit on cross-shareholding by June and freeze rates on mortgage loans provided by the National Housing Fund at current 5.2 percent for low-income households with less than 20 million won of annual income.

Cheong Wa Dae spokesman Lee Dong-kwan said the government held its first Cabinet meeting presided by the president and passed five bills including revised enforcement ordinances on transportation, energy and the environment.

At the meeting, President Lee said, “The global economy is on the brink of crisis. The Korean economy faces a bitter reality in which the economic growth rate is falling and commodity prices are inevitably rising.” He ordered relevant ministries to set up a set of plans dubbed “Schemes to Implement Effective Economic Policies to Revive the Economy.” The existing task force team to stabilize commodity prices will be replaced with a new team to stabilize lives of those in low-income brackets.

Besides cutting some tax rates, the government decided on what measures to adopt to stabilize the people’s livelihood and when to start those measures.

As President Lee called on the Cabinet to “put a lid on public utility charges,” the government decided to temporarily freeze 17 public utility fees under its control. Also, the government will put scrap iron and iron bar on the list of cornering and hoarding, in order to control a price hike.

Rep. Lee Han-gu, chairman of Grand National Party’s policy making committee, said, “Employees’ nominal salaries have risen. However, income deduction has not kept abreast with the change. I’ll push for new measures to link income deduction with commodity prices.”