41st Meeting of Central Economic Response Headquarters
13th Ministerial Meeting on the Korean New Deal
Government to Strongly Support Korean New Deal 2.0
Deputy Prime Minister Hong Nam-ki presided over the 41st Meeting of the Central Economic Response Headquarters held on July 22, which is also the 13th Ministerial Meeting on the Korean New Deal. DPM Hong discussed how important it is to successfully implement the Korean New Deal 2.0 for the country’s future and pledged active support. Plans to select national strategic technologies and measures to support business restructuring are main topics of discussion. The deputy prime minister talked about the importance of business restructuring to prepare for big changes in the future at the beginning of his keynote address, which the pandemic has been accelerating, in particular a digital and carbon neutral economy.
The following is a summary of Deputy Prime Minister Hong’s keynote address.
Strongly support Korean New Deal 2.0
Given recent changes amid the pandemic, we have to be prepared for an entirely different world beyond returning to the pre-pandemic level. With this in mind, the government has drawn up the Korean New Deal 2.0 and will accelerate the implementation of it by providing adequate fiscal and regulatory support, as well as working to attract private investment to it.
First of all, we will assign over 30 trillion won of the 2022 budget to the new deal 2.0.
Business restructuring support is scheduled to be announced this month.
Following the successful sales of Korean New Deal fund in the first half, the government will create a 100 billion won worth of fund in the second half via retail investment, which will finance the new initiative.
Plans to select national strategic technologies
Korea has decided to choose national strategic technologies among those for semiconductor and secondary battery manufacturing, as well as among technologies for vaccine development. A total of 65 technologies are to be selected for tax and other fiscal incentives aimed at promoting R&D and facilities investment. We will provide over 2 trillion won worth of support by 2023, along with tax benefits to promote R&D and facilities investment.
Support Korean New Deal 2.0: Promote business restructuring
The government will support business restructuring by improving regulations and expanding tax and other financial support.
- Revise laws to expand the support given to companies forced into business restructuring in order to include pressures from outside in the support categories, such as carbon neutrality goals
- Provide special exceptions to the Fair Trade Act for companies undergoing business restructuring due to carbon neutrality policies
- Provide 100 billion won worth of state guarantees for P-CBOs in 2021, as well as capital gains tax payment deferrals if the gains are invested in new businesses
- Create a 500 billion won worth of business restructuring support fund via Korea Development Bank in 2021
Support Korean New Deal 2.0: Help with retraining amid unavoidable industrial restructuring
The government will work to draw up most appropriate support based on labor demand outlooks.
- Promote the retraining of those working for the manufacturing of internal combustion engine vehicles or coal-fired generation
- Strengthen the business owner training programs to help with utilizing smart devices and tools
- Support the car industry’s transition to future cars, including facilities restructuring, and help coal-fired plants find alternative business models
