Debate Heats Up over President’s Proposal on Unification Tax

Shake up includes prime minister and 7 ministers in a move to solidify his centrist policies and support for ordinary folks

President Lee Myung-bak’s proposal to introduce a unification tax and three-stage Korean communities for the reunification of the Korean Peninsula has touched off a heated debate over the issue.
President Lee’s proposal was made in his speech during the 65th Liberation Day anniversary ceremony.
Cheong Wa Dae later toned down Lee’s proposal after a debate began over the matter.
In a news briefing on Aug. 17, Cheong Wa Dae spokesperson Kim Hee-jung quoted President Lee as saying, “We need to have a mindset to prepare for unification, but (the unification tax) won’t be levied right away,” while presiding over a meeting of his chief of staff and other presidential aides. “Division should not be permanent, but national policies will have to change from the management of the divided two Korean states to management for unification,” Lee was also quoted as saying. The president has always stressed the importance of unification so as to evolve Korea into an advanced nation, the spokesperson added.
The proposal over the unification tax has initially far-reaching implications for many walks of life, including political circles, which are deeply divided over the issue. Many people agree on the necessity, but it is unrealistic in consideration of the current inter-Korean situation, the burden arising from the levying of the tax and its financial soundness.
Even the ruling Grand National Party (GNP) appears to concur on the purpose of introducing the unification tax in order to brace for such emergencies as the sudden collapse of North Korea and future unification, but it apparently shows a wide range of differences over the specifics.
GNP floor leader Kim Moo-sung said his party is ready to discuss it with opposition parties if the government submits its own version on the issue, adding that it is right for the nation to take up the tax for future unification.
But many GNP lawmakers are cautious over the matter. GNP Supreme Council member Hong Joon-pyo said large amounts of inter-Korean cooperation funds are now available, so it is not too late to discuss the issue over the unification tax after the two Koreas could settle into a peaceful community.
Opposition circles, including the Democratic Party launched a scathing attack against the proposed unification tax, saying that it is an unrealistic proposal.
Celebrating the 65th anniversary of the nation’s liberation from Japan’s colonial rule on Aug. 15, Lee proposed five key principles in his address, titled “Marching Together toward a Greater Republic of Korea,” ― a fair society, individual freedom and uniqueness, diligence and creativity, centrist pragmatism, the advancement of living standards, and an equitable world.
The president proposed “an equitable world” as the principle for the management of state affairs. He also proposed “we should build a fair society so that everyone receives equal opportunities without exception.” He also said “we should focus on the value of our society, which encourage the values of individual freedom and uniqueness, diligence and creativity and gives opportunities to those who are left behind so that no one should remain behind forever.”
The president also proposed “three-stage inter-Korean communities” including a peaceful community, economic community and a community of the Korean Nation in order to achieve the reunification of the Korean Peninsula.

President Reshuffles Cabinet
President Lee Myung-bak carried out a large-scale cabinet reshuffle early this month to complete his policy goals in the remaining years of his five-year term and in response to the ruling Grand National Party’s favorable election results in the by-elections for eight National Assembly members on July 28 in which the ruling party won five seats and offset the party’s defeat in the local elections on June 2.

Kim Tae-ho, former governor of South Gyeongsang Province, has been nominated new prime minister in a cabinet shakeup that also replaced seven ministers and two minister-level officials, the presidential office Cheong Wa Dae announced Aug. 6.
President Lee Myung-bak’s first cabinet reshuffle since September 2009 comes on the heels of the ruling Grand National Party’s (GNP) defeat in the June 2 local elections, which chose many of the country’s mayors and governors, and a turnaround for the ruling GNP in the July 28 by-elections in which the party won five of the eight contested parliamentary seats. Lee begins the latter half of his single five-year term later this month.
It did not affect the ministers handling foreign affairs, national defense or inter-Korean ties, signaling that the president will maintain a tough stance on North Korea, which South Korea accuses of sinking its warship with a torpedo in March. Korea and its ally the United States held large-scale naval exercises in both the East Sea and Yellow Sea, facing the eastern coast of China to warn North Korea against further hostile acts against the South. China backed up North Korea in its vehement opposition to the naval exercises. Rep. Lee Jae-oh, who was elected in the by-elections from Seoul, was named as minister for special affairs drawing huge attention across the country, as he has been a close aid to the president and has just made a political comeback.
The president also retained Minister Chung Jong-hwan of the Ministry of Land, Transport and Maritime Affairs and Minister Lee Manee of the Ministry of Environment in a show of his determination to continue to push the Four Rivers Restoration Project to the finish despite the fierce opposition put up by opposition parties. The president wants to see the project 60 percent completed this year and he needed the ministers to take charge of various problems that might occur during the rainy season.
The president also retained the make-up of the financial ministerial portfolios led by Minister Yoon Jeung-hyun of the Ministry of Strategy and Finance and Commissioner Chin Dong-soo of the Financial Services Commission, as he wants the G-20 Summit in Seoul in November to be a resounding success and Korea’s international position to get a big boost as the chair nation of one of the key global meetings. He also wanted to continue to focus on the wellbeing of the working people, especially the young people whose jobless rates are much higher than the national average.
“The cabinet shake-up this time is aimed at solidifying the key note of moderate pragmatism-oriented policy based on communication and integrity, accepting the demand for reform of the party, the government and Cheong Wa Dae as shown in the June 2 local elections and the July 28 by-elections,” Hong Sang-pyo, senior secretary for public relations at the presidential office, told reporters.
Prime Minister-designate Kim, 47, is expected to play a pivotal role in bolstering the government’s communication with the young generation, he added. Kim vowed efforts to live up to the expectations. “I will try to become an icon of communication and unity,” he said in a press conference. “The key agendas of the Lee Myung-bak government are a pro-seomin (ordinary working people) policy, centrist pragmatism and economic rehabilitation.” He pointed out that what is most important in bearing fruit in those goals is communication with the people and social integration. “I will take the lead in communication and unity and play a role,” he added. The prime minister-designate said his appointment shows that Korea is a land of opportunity for anyone, who with courage and hard work can succeed, a message he thought the president wanted to send to the people. Kim served as governor of South Gyeongsang Province from 2004 until earlier this year and did not run for the June local elections. If confirmed, he will become the country’s first prime minister under the age of 50 in four decades. His nomination is subject to the National Assembly’s confirmation.
The Chief Executive has had an eye on Kim since Lee was mayor of Seoul for the then-provincial governor’s refreshing manner, strong will for overcoming a tough environment and his capacity to handle problems. The emergence of young leaders in important positions around the world, such as Britain’s Prime Minister Cameron and U.S. President Obama, both in their forties, and young candidates winning in the June 2 local elections as governors and mayors around the country played a big role in President Lee’s decision to name Kim prime minister, political sources said.
Kim will replace Chung Un-chan who tendered his resignation last month to take responsibility for the government’s foiled attempt to revise a plan to develop the central city of Sejong, where the former Roh Moo-hyun administration sought to create an administrative town as part of efforts for the balanced growth of the country. The current government tried to scrap the plan and build a business-education hub there instead.
The president also named Lee Jae-oh, one of his closest aides and the leader of his faction in the National Assembly, as minister for special affairs, who is tasked with dealing with political affairs and relations with North Korea. The new minister changed his job just 11 days after being elected lawmaker in the latest by-elections.
Lee Ju-ho, vice education minister, was nominated for education minister, while Shin Jae-min, vice culture minister, and Lee Jae-hoon, vice knowledge-economy minister, were promoted to culture minister and knowledge-economy minister, respectively.
Yoo Jeong-bok, a lawmaker of the GNP, was designated agriculture minister and Chin Soo-hee, another GNP lawmaker, was named health and welfare minister.
Bahk Jae-wan, who worked as senior presidential secretary for national policy planning, was tapped as labor minister and Rim Che-min, formerly vice minister for knowledge-economy, was named minister at the Office of the Prime Minister.
Political parties issued a mixed response. The main opposition Democratic Party described the cabinet shake-up as the “worst in history.” “It is no doubt the worst ever reshuffle in history that only put the personal guards of President Lee in front,” party spokeswoman Jeon Hyun-hee said. The GNP hailed it, however. “The new cabinet consists of people who can fully support the Lee Myung-bak government’s drive to achieve its policy goals for the second half of its term,” GNP spokesman Ahn Hyoung-hwan said. The nation’s business circles had high expectations for the new cabinet. “Business circles believe the new, young cabinet will greatly contribute to the nation’s development by spearheading government efforts to reform and change,” the Federation of Korean Industries, the largest industry lobby in South Korea, said in a released statement.
The Korea International Trade Association (KITA) expressed hope that the new cabinet will work to further promote trade and create jobs. “Also, we hope the new cabinet will help raise the status of the country and improve the competitiveness of its businesses by successfully hosting the G-20 summit and the business summit to be held in Seoul in November,” KITA said. nw

President Lee Myung-bak delivers his commemorative speech marking the 65th Liberation Day in which he proposed the introduction of a unification tax.

(from left) Prime Minister-designate Kim Tae-ho; Minister-designate Lee Jae-oh of the Ministry of Special Affairs; Minister-designate Lee Jae-hoon of the Ministry of Knowledge Economy; Minister-designate Lee Ju-ho of the Ministry of Education, Science and Technology; Minister-designate Yoo Jeong-bok of the Ministry of Food, Agriculture, Forestry and Fisheries; Minister-designate Shin Jae-min of the Ministry of Culture, Sports and Tourism; Minister-designate Park Jae-wan of the Ministry of Employment and Labor and Minister-designate Chin Soo-hee of the Ministry of Health and Welfare.